Adedapo AdesanyaBy Adedapo Adesanya
Oil recovered previous losses after top oil producer, Saudi Arabia, dismissed calls for additional supply by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
Brent crude rose by $1.29 or 1.07 per cent to trade at $84.25 per barrel and the US West Texas Intermediate (WTI) crude gained $1.29 or 1.04 per cent to sell at $81.48 per barrel.
One of the chairs of the 23-member alliance, Saudi Arabia dismissed calls for additional production increases, saying the group’s unwinding of production cuts was protecting the oil market from wild price swings seen in natural gas and coal markets.
Speaking at a forum in Moscow on Thursday, the Saudi energy minister Prince Abdulaziz bin Salman said efforts with allies were enough.
“What we see in the oil market today is an incremental (price) increase of 29 per cent, vis-à-vis 500 per cent increases in (natural) gas prices, 300 per cent increases in coal prices, 200 per cent increases in NGLs (natural gas liquids),” the Minister said.
He noted that the alliance was doing a remarkable job acting as the regulator of the oil market, saying the gas markets, coal markets, and other sources of energy need a regulator.
The government official disclosed that OPEC+ would be sticking to its 400,000 barrels per day agreement in November, and then again in the following months.
This lifted the market after the Energy Information Administration (EIA) reported a crude oil inventory build of 6.1 million barrels for the week to October 8.
At 427 million barrels, inventories are below the five-year average, but even though this has been a fact for a few weeks now, it has not stopped the climb in fuel prices.
Meanwhile, in its monthly report, the International Energy Agency (IEA) increased its global oil demand growth forecast in 2022 by 210,000 barrels per day and now expects total oil demand in 2022 to reach 99.6 million barrels per day, slightly above pre-pandemic levels.
It made upward revisions to its demand forecasts for this year by 170,000 barrels per day, or a total addition of 5.5 million for the year, and by 210,000 barrels per day in 2022, or a total addition of 3.3 million.
The Paris-based agency then estimated that producer group OPEC+ is set to pump 700,000 barrels per day below the estimated demand for its crude in the fourth quarter of this year, meaning demand will outpace supply at least until the end of 2021.
