Mazroyi, chairman of OPEC and Minister of Energy and Industry of the United Arab Emirates, said on April 22nd that OPEC was not artificially driving up oil prices, but was working together to achieve the noble goal of saving the market.
"I don't think we have ever said that we want to set targets for oil prices," Mazroyi said in an interview. We all remember what happened two years ago, when the oil market faced an inventory glut, which was not caused by OPEC. No one intervened. "
In 2016, an increase in US shale oil production caused oil prices to fall below $30 a barrel. Subsequently, the oil market fell sharply.
"OPEC and non-OPEC producers have joined forces and they have sacrificed some of their oil production in an attempt to address imbalances in the oil market," Mr Mazroyi said. Therefore, I think the goal of OPEC is to rid the oil market of chronic oversupply, which is a noble goal. "
Photo Source: https://pixabay.com
Last week, US President DonaldTrump attacked OPEC on Twitter, saying it was responsible for artificially high oil prices. Oil prices rose above $70 a barrel in March on fears that tensions in the Middle East could escalate.
Mazroyi said the situation in the oil market is much better because of agreements reached between OPEC and major oil producers such as Russia to limit oil production by the end of 2018. But he also pointed out that there is still a lot of work to be done to balance the oil market. His view resonated with Saudi Energy Minister Khalidal-Falih and Russian Energy Minister AlexanderNovak.
The problem now, says Mr Mazroyi, is that if the market is again faced with oversupply, it will be even more difficult in the future.
The analysis shows that OPEC is close to the production reduction target.
April twenty _ thirdMatthewParry, head of long-term research at EnergyAspects, said global markets had tightened sharply in recent months and OPEC was very close to its original target of reducing OECD inventories to a five-year average.
Overall, he pointed out, most of the production adjustment was not the result of deliberate supply cuts, but was forced by geopolitical troubles, such as Venezuela's 600000 b / d oil supply reduction during this period. this is mainly because the country has been affected by the economic crisis or the natural depletion of aging wells, which have affected oil supplies in countries such as Angola. He believes that without the recent strong global demand, OPEC will not meet its production reduction target.
Parry pointed out that geopolitical tensions are undoubtedly the dominant factor in the recent rebound in oil prices. He wouldn't be surprised if the price of WTI crude rises above $80 a barrel in the second half of next year.
In addition, as oil prices climbed to their highest level since 2014 and commodity funds recovered from client outflows last year, hedge funds investing in oil are attracting money at their fastest pace in more than a year.
A number of institutions, including WestbeckCapitalManagement, predict that if oil prices soon rise from the current $68 to more than $80 a barrel, the increase in investment in oil could be just the beginning.
Trump's threat to withdraw from the Iran nuclear deal has been pushing up oil prices. Saudi Arabia, the world's largest oil exporter, wants to push oil prices to $80 a barrel to help cover the government's policy agenda.
In addition, declining Venezuelan oil production, falling global inventories and worsening tensions in Syria are also playing a role. Tensions in Syria could have an impact on oil prices by disrupting oil supplies throughout the region.