[오피니언뉴스=이상석 기자] Following the surprise decision to cut production by OPEC and OPEC Plus (+), a consultative body of major non-OPEC oil producing countries such as Russia, the theory of rising oil prices is reviving in the market, but the possibility of a reduction in demand due to the economic recession is also not huge.
Major investment banks (IBs) such as Goldman Sachs and RBC Capital Markets raised their oil price forecasts immediately after the announcement of OPEC+ production cuts, Bloomberg reported on the 9th (local time).
Ryan Fitzmorris, chief index trading manager at commodities brokerage Marex Group, said OPEC’s surprise production cuts were already raising concerns about a resurgence in inflation.
Many market participants still expected that the possibility of a drop in demand due to the economic recession would prevent further increases in oil prices.
They raised questions about the timing of the OPEC+ decision to cut production, which will affect the market from the second half of this year.
In general, at the moment, demand for crude oil is at its highest as vehicle traffic increases due to the summer holiday season in the US, and the reopening of the Chinese economy, which has shrunk due to Corona 19 pandemic, start in earnest.
Unlike OPEC, which has usually increased supply as much as possible at the moment, the market for its decision to cut production this time is asking if oil prices will rise to $100 a barrel due to increased demand or whether they will reduce demand due to the economy. There is said to be a debate over whether supply has been reduced in preparation for this.
Refined product prices were flat even during the recent rise in oil prices, and in Asia, the price of diesel, a major refined oil product, fell to its lowest level since November last year.
Although fuel inventories in the United States have declined, global inventories remain high, and Russia’s failure to keep its promise to cut production from last month fueled suspicion.
During the first quarter of this year, commercial crude oil stocks held by Organization for Economic Co-operation and Development (OECD) countries were 8% higher than the same period last year. This was assessed to reflect a reduction in consumption of sufficient magnitude to mitigate the shock.
Russia also announced it would cut production by 500,000 barrels per day (bpd) in retaliation for the import ban and price restrictions from March, but the number of barrels leaving Russia was found not to have decreased.
Bloomberg reported that undisclosed data from the Russian Energy Ministry showed that Russia had cut production by 700,000 barrels per day since last month, and that the figures shown in related data do not match, making it impossible to know exactly and is the degree to which production cuts will be accurate.
Along with this, rumors of oil prices reaching $100 have been circulating since the end of last year, but the possibility seems to be gradually diminishing.
Some analysts predicted that oil prices would reach the 100 dollar level in the second quarter of this year, but now more analysts predict that the possibility of reaching the 100 dollar level by next year is slim.
The US shale gas industry, which has been competing with OPEC for market share, collapsed after the pandemic, reducing one of the factors OPEC needs to consider when making supply decisions.
In this way, as supply shortages and sluggish demand conditions coexist in the market, uncertainty about the direction of inflation has increased, making the fight against inflation (inflation) central banks around the world, including the US Federal Reserve, more complicated. .
It is now clear that a significant change in the control of the oil market has passed into the hands of Saudi Arabia and its allies, with far-reaching implications for the geopolitical situation and the global economy, Bloomberg added.
Reporter Lee Sang-seokkant@opinionnews.co.kr
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