Global oil markets won’t be able to absorb planned production increases by OPEC+ members as demand remains weaker than expected, said the head of commodities trader Mercuria Energy Group.
Oil stockpiles have been building in September and won’t draw down enough in the remainder of the year to be in balance if the cartel follows through with its plan to taper production cuts early next year, Marco Dunand, Mercuria’s co-founder and chief executive, said in an interview.
“We do not need the extra oil,” Dunand said from the firm’s headquarters in Geneva.
The forecast, by one of the world’s biggest independent oil traders, is ominous for Saudi Arabia, Russia and the rest of OPEC+ who have made historic output cuts this year in an effort to save a market battered by the coronavirus pandemic. With the cartel due to discuss further easing some of those curbs from January 2021, the warning that stockpiles have been building again could force OPEC+ to reconsider.
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