OPEC: No Recovery In Oil Prices Next Year

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The Organisation of Petroleum Exporting Countries (OPEC) at the weekend said there would likely be no recovery in oil demand or prices next year because the COVID-19 pandemic would be worse.

It said though the death rate has plateaued, new cases are climbing steadily. “Death rates are likely to follow suit. That means there will be little, if any, increase in oil demand. Many people are grossly underestimating the long-term effect of this pandemic. New cases are increasing just as we are facing five months of cold weather. I think we can expect to see sub $40 oil until well into 2022.

“This pandemic will likely bring on a deep worldwide recession that will take years to recover from. The misery is just beginning,” it said.

According to its OPEC Monthly Oil Market Report released at the weekend, the oil cartel said it total oil production was down by 47,000 barrels per day (bpd) last month but that was after August production was revised upward by 109,000 bpd.

The report showed that Russia is the only other oil-producing nation that has production data for September. Russia’s C+C production was up 61,000 barrels per day in September.

During the period under review, Algeria’s production was basically unchanged while Angolan crude production increased by 47,000 bpd.

While Equatorial Guinea was simply in slow decline as well as Gabon, not much change was seen in the Republic of the Congo.

Iran is holding steady but said to be exporting more oil than this chart would indicate while not much change in Iraq for the last four months.

While Kuwait also holding steady, it appeared to be producing pretty close to flat out.

Rebels are still raising hell in Libya. The political situation there doesn’t seem to be getting any better. Parts of North Africa are in almost as bad a shape as sub-Saharan Africa.

Speaking of sub-Saharan Africa, Nigeria has had constant political problems for decades. Things will get a lot worse in Nigeria before they get better, and that includes their oil exports.

Saudi Arabian crude production was up 35,000 barrels per day in September; however, their August production was revised upward by 30,000 barrels per day.

The UAE was the only OPEC nation with any major change in production in September. Its September crude production fell by 239,000 barrels per day. However, that was after their August production had been revised upward by 68,000 barrels per day.

Venezuelan crude production was up 32,000 barrels per day in September. For the last four months they have produced between 300 and 400, 000 barrels per day. Things are likely to get much better in Venezuela for a decade or so because Maduro is starting to cannibalise the Orinoco pipeline for scrap metal to pay contractors.

– The Nation

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