Madrid

30/06/2021 – 20:03

The equator of 2021 has arrived and the Organization of Petroleum Exporting Countries (OPEC), together with its external partners, has to make a decision that will mark the evolution of crude prices in the coming months:

Either open the tap more, and thereby reduce the crude supply deficit that exists at the moment, or maintain the current cut in production to try to keep prices around $ 75 for the year. Brent.

This is the price at which the European barrel is now moving, after a rally which has led it to recover almost 290% since May 2020. Today it will be known if the producer cartel considers that it is an acceptable price, after the barrel has closed its most bullish semester since 2009, with a revaluation close to 50%.

Although the meeting has not yet begun, the cartel members are already beginning to give clues about their intentions. A possible increase in supply is already on the table, which would arrive in August or September, as highlighted on Wednesday the Minister of Energy of Kazakhstan.

Saudi Arabia and Russia, the world’s two largest oil producers alongside the United States, represent the two main positions currently being debated. The former is more in favor of taking things slowly and waiting to see the evolution of the situation to confirm the increase in supply. Russia, however, wants to start increasing production as soon as possible. The debate will revolve around these two proposals, a situation that is already common within the coalition.

We must remember the last disagreement between the two major oil powers, in the middle of last year and in the middle of the Covid crisis, which led to the last oil price war by the two partners, a disagreement that they decided to end months later. , but that was repeated last December, when the OPEC meeting had to be postponed for several days to achieve an agreement, materialized in a gradual increase in supply.

More inventories in spring

The technicians of the OPEC + They have already published some conclusions about the impact that the cartel may have already starting to turn on the taps. In his view, global oil inventories will begin to rise again next spring if that resolution is agreed, and these would exceed by the end of 2022 by 181 million barrels the average at which warehouses have remained between 2015 and 2019.

The increase could be even greater if a new nuclear agreement with Iran is closed, for which negotiations continue today, a pact that would allow the country to increase its production again and bring it to normalized figures. Iran has a production capacity close to 4 million barrels per day (even its Minister of Energy has ventured that the country could reach 6 million barrels), and last May it moved in the vicinity of 2.4 million barrels.

Warehouses are being emptied in the United States

The amount of oil stored in the United States continues to fall sharply, and it is already six consecutive weeks in which inventories have been reduced in the country. In the week ending June 25, inventories were reduced by 6.7 million barrels, as it was known yesterday, a stronger drop than previously estimated, which was targeting 4.4 million barrels. The increase in demand, in this way, continues to be noticed in the North American giant.

Brent oil surpasses $ 75 for the first time since 2018

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