Gazprom Neft sees slight surplus on oil market

Company head believes new OPEC+ supply cuts will balance market

MOSCOW:

Alexander Dyukov, the head of Russian oil major Gazprom Neft, said on Saturday that there was a slight surplus on the global oil market.

He also said that the new oil supply cuts, implemented by the OPEC+ group of leading oil producers from the start of January, will balance the market.

Last November, OPEC+ agreed to voluntary output cuts totalling about 2.2 million barrels per day (bpd) for the first quarter of this year, led by Saudi Arabia rolling over a 1-million-bpd voluntary reduction.

OPEC+ will hold a meeting of a key ministerial panel next Thursday. The group’s sources said that it will likely decide its oil production levels for April and beyond in the coming weeks.

The Paris-based International Energy Agency, which advises oil consuming countries, has said that with conflict in the Middle East raising concern over supply – barring significant disruptions to flows – the market looked reasonably well supplied in 2024 and a surplus could emerge if OPEC and its allies unwind output cuts as scheduled in the second quarter.

Read Oil prices edge up

Oil prices rose for a second week in a row and settled at their highest in nearly two months on Friday as positive US economic growth and signs of Chinese stimulus boosted demand expectations, while Middle East supply concerns added support.

Brent crude futures rose $1.12, or 1.4%, to settle at $83.55 a barrel, their highest close since November 30. US West Texas Intermediate crude (WTI) climbed 65 cents, or 0.8%, to $78.01, also the highest close since November.

Both benchmarks made weekly gains of more than 6%, marking their biggest weekly increase since the week ending October 13 after the start of the Israel-Hamas conflict in Gaza.

“Economic stimulus from China, stronger-than-expected Q4 GDP growth in the US, cooling US inflation data, ongoing geopolitical risks, and the larger-than-expected 9.2-million-barrel drop in US commercial crude stocks for last week have all combined to wedge prices higher,” said Tim Evans, an independent oil market analyst.

Published in The Express Tribune, January 28^th, 2024.

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