MOSCOW, September 6. /TASS/. OPEC+ countries decided to postpone the oil production recovery planned for October by two months. However, at the moment the market underestimates these actions and ignores positive news, according to experts interviewed by TASS.
From the Q1 2024, eight OPEC+ countries, including Russia and Saudi Arabia, voluntarily reduce production by 2.2 mln barrels per day (bpd). However, starting in October 2024, these countries plan to gradually begin restoring oil production. At the same time, OPEC+ did not rules out a revision of the decision to restore production depending on market conditions. According to the schedule, the volume of production increase should amount to 180,000 bpd in October.
Finam analyst Nikolay Dudchenko noted that yesterday’s OPEC+ decision demonstrates the cartel’s readiness to continue controlling the situation on the oil market. "At the same time, as we can see from the price behavior, these measures are not yet enough to stabilize prices," the expert said. "We believe that the market largely underestimates the actions of OPEC+ and geopolitical risks. In addition, the speculative component is a rather strong factor at the moment," he added.
Dudchenko did not rule out that the market could have expected a little more from OPEC+: for example, a complete cancellation of the decision to restore oil production. However, according to the expert, such decision does not correspond to the interests of all OPEC+ participants. In addition, according to him, the geopolitical situation in the Middle East remains difficult, which is also ignored by the oil market. "We believe that the probability of a return to the [oil] price premium for geopolitical risks is high," the analyst added.
At the same time, stock market expert at BCS World of Investments Lyudmila Rokotyanskaya believes that the sharp drop in oil prices to below $73 per barrel this week could not have happened due to OPEC+ plans to return part of the supplies to the market from October. According to her, this volume of oil was insignificant for the market and could have been offset by planned production cuts from Kazakhstan and Iraq. "In general, the market was bearish yesterday - so far, it ignores positive news and pays too much attention to future negative scenarios," the expert believes.
Dmitry Kasatkin, partner at Kasatkin Consulting, in turn, emphasized that the OPEC+ decision was certainly a reaction to events in the oil market: forecasts of high oil production in the United States, recovery of production in Libya, and unstable demand in China. All this is also happening against the backdrop of some OPEC+ countries not having enough time to adapt to the alliance’s production restrictions, the expert added.
"We shouldn’t expect a strong immediate effect [from OPEC+’s actions], but prices will gradually return to the levels of the first half of the year at around $80 per barrel for Brent," he believes.