(CTN News) – OPEC is replacing its monthly oil market report estimate of “call on OPEC crude” with a “call on OPEC+ crude,” indicating that it remains committed to the OPEC+ collaboration to regulate supply.
The Monthly Oil Market Report (MOMR) for May, scheduled for release on May 14, is expected to feature an update on OPEC’s predicted oil production to balance supply and demand.
According to one source, OPEC+ signatories need petroleum while assessing market balance.
OPEC’s April report contained a first-ever estimate of “demand for DoC crude” in addition to oil demand. OPEC petroleum demand estimates will end in May, Reuters sources said.
“Demand for DoC crude (i.e., crude from countries that have signed the Declaration of Cooperation) is anticipated to reach approximately 43.2 mb/d in 2024,” OPEC added. “This is an increase of approximately 0.9 mb/d compared to the estimated level for 2023.”
Compared to 2024, OPEC+ crude demand is predicted to climb by 800,000 barrels to 44.0 million barrels in 2025.
This year’s OPEC crude consumption is estimated to be 28.5 million barrels per day, 1.2 million more than in 2023. OPEC crude demand is predicted to rise by 400,000 barrels per day to 29.0 million in 2025.
OPEC+—a group of ten non-OPEC producers led by Russia and including OPEC members—has become a bigger market force and a bigger factor in world supply than OPEC did before the alliance was formed at the end of 2016. The market and price fall after the 2014 glut in 2015–2016 prompted its creation.
Reuters reported that OPEC+ controlled 41% of global oil production.
While OPEC controlled 27% when Angola departed in 2023. Analyst speculation on the June 1 meeting’s agenda shows OPEC+’s market dominance. The alliance will remove about 2.2 million bpd by the end of the first half of the year. Extension of output cuts into the second half will be decided early in June.
Goldman Sachs now expects OPEC to keep to its production restrictions at its upcoming meeting, reversing its earlier prediction that it would partially reverse the cutbacks.
Goldman Sachs says “While our interpretation of OPEC+ communication is that no final decision has been made, we now expect Saudi crude supply to remain flat at 9 mb/d (million barrels per day) in July (vs. 9.2 previously).”
Goldman Sachs changed its opinion when global oil stockpiles rose more than predicted, suggesting the market is not as tight as OPEC had hoped.
Analysts say Brent Crude has dropped to $80 since mid-April. Thus, OPEC+ may decide to do nothing on supply and delay output increases in July.
According to ING analysts Warren Patterson and Ewa Manthey, price weakness will make OPEC+ members more likely to carry out their voluntary cuts into 2024, which could result in overtightening the market later in 2024, assuming no unexpected downward demand surprises..”
“However, the December elections in the United States may also impact the decision-making process of OPEC+ members,” said.
OPEC+ is tightening its control over oil supply and prices, even though its market share has declined due to the rise of non-OPEC+ suppliers, including the US.
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