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The deal was tapering and aimed at allowing countries to produce more as demand recovered. However, due to the crisis, over 7 million b / d of crude oil remains offline. They will meet again on January 4th to discuss the addition of 500,000 b / d.
Tensions are growing within the group as we weigh the desire to restructure new blockades and profits.
The long-term demand issue is a cloud over the entire OPEC + alliance, which has expanded to include Russia and other producers since 2016.
Analysts at RBC Capital Markets argue that concerns about new price competition within the group weigh heavily on sentiment.
“Market rebalancing relies heavily on OPEC + output control,” RBC said.
When Donald Trump leaves the White House, the biggest geopolitical changes in 2021 will probably come early for the oil market. Trump became deeply involved in OPEC’s decision and pressured Saudi Arabia to increase or decrease production in return for his support.
President Joe Biden is expected to rarely experience the cartel, but he may eventually become less influential. Tehran could return nearly 2 million b / d of crude oil to the market if US sanctions are eased as Iran’s nuclear trade could revive.
The tensions of some weak oil producers in Africa, Latin America and other regions are also carefully watched. Falling oil prices have hit everything hard and threaten political stability.
One of the worst sectors of the oil industry in 2020 was refining. Crude oil has been helped by OPEC + Group’s supply management, but refiners have fewer levers to pull when demand falls. This means that the margin is low throughout the year.
It is widely expected that in 2021, especially in Europe, the shift in consumption patterns to the east will accelerate the permanent shutdown of plants.
However, if a sufficient number of plants are closed, it should eventually boost the margins of standing plants.
© 2020 The Financial Times Ltd
Five Things to Watch in 2021 After This Year’s Rough Oil Ride
https://financialpost.com/financial-times/five-things-to-watch-in-2021-after-oils-wild-ride-this-year Five Things to Watch in 2021 After This Year’s Rough Oil Ride