OilPrice.com: Oil Markets Could Face A Doomsday Scenario This Week
* Expect lots of oil price volatility in the coming months as markets finally discover just how much spare capacity OPEC members really have.
* Oil production outages in Libya and the continued impact of Russia’s invasion of Ukraine are going to push oil prices higher if new supply isn’t found.
* While some analysts are predicting oil demand destruction in the near future, there is little evidence to back up those claims.
Global oil markets are going to be very volatile in the coming months if news emerging from OPEC’s main producers about production capacity constraints turns out to be true. OPEC will be meeting again in the coming days to discuss its export agreements, while today the oil group is presenting its Annual Statistical Bulletin (ASB) 2022. While the media is likely to be focused on rumors in the next 24 hours of a possible change in the export strategy of OPEC+, the real focus should be on whether or not the oil cartel is even capable of substantially increasing its production. For years, OPEC producers have been the main swing producers in oil markets. With a presumed spare capacity of more than 3-4 million bpd, Saudi Arabia and the UAE have always been seen as a point of last resort in case of a major crisis in oil and gas markets.
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Update #1: Oil producers usually tame soaring prices by turning on the taps. Here’s why that may not work this time (CNN)
Update #2: Oil market confronts U.S. and EU policymakers with unpalatable choices (Reuters)
WNU Editor: Russia is the world's second largest producer of oil, and with sanctions now targeting its oil exports, it is a guarantee that oil markets are not going to be stable for as long as the Russia - Ukraine war continues, and sanctions is the West's response to it.
