Ending the Era of Low Oil Price

 

Ending the Era of low oil price

• Oil prices could break the previous price record of $120 if China gets over Covid. According to Global’s forecast, China’s crude oil demand could rise to 15.7 million barrels per day next year, which would be a 700,000-bpd increase over 2022.

• Though have a risk in oil markets of a global recession, as seen in recent oil price fall around $71 in its most bearish scenario.

• United States government placed order to buy oil for its strategic petroleum reserve just after price slump at minimum level US$71 to fill up the released amount of 200 million barrels from reserve.

• The three major oil price drivers next year are likely to be China’s demand growth, the risk of a global recession, and another factor that would affect oil prices next year is Russia’s response to the oil price cap that the G7 and EU imposed on shipments of Russian crude on December 5.

• OPEC has not consistently produced more than 30 million bpd as much oil as it agreed to produce. The shortfall was some 1.8 million barrels per day, that sort of undershooting of its own target has become a regular thing for the cartel.

• Most of the oil field production depleted and could not reach to target/increase production as anticipated demand.

• Worldwide strategic storage policy of petroleum might accelerate oil price upward.