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Tag: Oil Price

  • JUST IN: Oil price hits $71.28 per barrel

    JUST IN: Oil price hits $71.28 per barrel

    Oil price has risen to $71.28 per barrel in the international market, for the first time in the year 2021.

    This is coming on the heels of Thursday’s meeting where the Organisation of Petroleum Exporting Countries (OPEC) and other members resisted the pressure to increase production.

    Before Thursday’s meeting, Brent oil was up $1.28, or two per cent, to $63.98 a barrel by 1050 GMT on Wednesday.

    Norbert Rücker, an analyst at Swiss bank Julius Baer, on Wednesday, revealed that oil prices might push above $70 before mid-year.

    “We see oil prices pushing temporarily above $70 by mid-year,” he said.

  • FG welcomes rising crude oil price – Minister

    FG welcomes rising crude oil price – Minister

    The Federal Government has described as a welcome development the rising price of crude oil in the global market, saying, “this is a good omen for Nigeria”.

    The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, made this known on Thursday in Abuja when she addressed State House correspondents on the state of the nation’s economy under the Buhari-led administration.

    According to her, gaining more revenue from the sale of crude will yield more revenue for government as well as reduce the country’s rate of borrowing.

    The minister said: “The more revenue we realise out of the budget, the less we borrow. As we see the oil price rising and provides us more revenue, it provides us some reliefs.

    “We will be able to reduce our borrowing so, it is a positive thing for us.”

    On Nigeria’s access to COVID-19 vaccines, Ahmed assured that government adequate provision had been made in the 2021 budget for the procurement of the vaccines.

    She, however, revealed that there would also be a supplementary budget for the 2021 national budget and it would include funds for the procurement of the vaccines.

    She said: “We have a provision in the 2021 budget for immunisation. We are already releasing money to the health authority to start operation in the first batch of vaccines that is going to arrive the country in one week.

    “But what we have in the budget is not enough, so we are working with the health authorities to provide a plan that will be taken to the president for approval and to be taken to the National Assembly as a supplementary budget specifically for COVID-19 vaccination.

    “There will be a supplementary budget; the first one will be in March relating the COVID-19 pandemic.

    “But, we will also have a mid-year review like we did last year of the budget and if at the time we do the review and there is a need to go back to do any amendment for supplementary budget, at that time we will take that decision, if not, we will just report the review.’’

    On the support facility made available to Nigeria by the World Bank and other International financial institutions, the minister disclosed that at the end of 2020, Nigeria was able to realise 3.4billion dollars from International Monetary Fund (IMF) and 600million dollars from African Development Bank (AfDB).

    She, however, stated that the country could not conclude negotiations with the World Bank and the Islamic Development Bank.

    “We closed 2020 by being able to realise 3.4billion dollars from International Monetary Fund (IMF), 600million dollars from AfDB.

    “We were not able to conclude our negotiation with the World Bank and also with the Islamic Development Bank.

    “Even with Islamic Development Bank, we signed for the last tranches but for the World Bank, we started negotiation with the list of about 10 requirements that we needed to address and we had addressed those 10 requirements.

    “But, the World Bank position is that we have not sufficiently addressed the requirements relating to having a single exchange rate.

    “Our point is that, is not what you do over night. It’s not that you wake up and make a pronouncement and that happens. It’s something that you have to do over time taking several measures and working systematically for it to happen.

    “So, we are still pushing our view with the World Bank and we hope to convince them that this requirement has also been met and that they should now give us approval to go ahead and release the 1.5billion dollars that we have been discussing with the World Bank.’’

    She said that the World Bank had in 2020 approved some facilities for Nigeria which included the 500million dollars for metering system for the distribution network, 750million dollars for the power sector recovery programme.

    She said that several other facilities that were tabled before the World Bank also got approval in the year under review.

    The minister also justified Nigeria’s rate of borrowing, saying that, “the proportion of borrowing is not misplaced as the country needs to develop its infrastructure, in order not to be left behind.’’

    Ahmed also stressed the need for the three tiers of government to increase their revenue generation capacities to enhance the nation’s debt service obligations.

    “We also have to make sure that when we are choosing the projects, we are choosing carefully the ones that will enhance business environment so that more revenue yields come into the treasury of the country,” she said.

    She revealed that Nigeria’s total borrowing as at Dec. 31, 2020, stood at N32.9 trillion, representing 21.6 per cent of the GDP, adding that at 2019, the debt to GDP ratio was 19.2per cent

  • Oil price rises to $58, OPEC+ commends adherence to output cut

    Oil price rises to $58, OPEC+ commends adherence to output cut

    The Organisation of Petroleum Exporting Countries (OPEC) said its members had achieved 101 per cent adherence to crude oil output cut mandatorily agreed upon last year to curb huge supply glut.

    This is coming as oil price rose to $58 per barrel yesterday hitting over 11-month high after major producers showed they were cutting crude output in line with their commitments on restraint.

    Disclosing this at the 26th meeting of the Joint Ministerial Monitoring Committee (JMMC), in Vienna, held via video conference under the chairmanship of Prince AbdulAziz bin Salman, the organisation expressed hope that the oil market will recover in 2021.
    OPEC highlighted Nigeria’s efforts at meeting its own output cuts, describing it as commendable.

    The committee emphasised the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (extraordinary) OPEC and non-OPEC Ministerial Meeting on 12, April 2020.

    The decision was to adjust downwards overall crude oil production, following the extraordinary hit taken by the commodity as a result of the COVID-19 pandemic.

    The committee acknowledged the positive performance of participating countries, especially their adherence to the deal made in April last year.

    “Overall conformity with the original production adjustments was 101 per cent, reinforcing the trend of high compliance by participating countries.

    “The committee noted that since April 2020 ministerial meeting, OPEC and non-OPEC countries have adjusted oil production down by a cumulative 2.1 billion barrels, stabilising the oil market and accelerating the rebalancing process.

    “The committee further noted that DoC participants pledged to achieve full conformity and make up for previous compensation short-falls, and stressed the importance of accelerating market rebalancing without delay. The progress of Nigeria in this respect was well noted,” it stated.

    According to the cartel, while economic prospects and oil demand will remain uncertain in the coming months, the gradual rollout of vaccines around the world is a positive factor for the rest of the year, boosting the global economy and oil demand.

    OPEC urged all participating countries to remain vigilant and flexible given the uncertain market conditions and to stay on the course.

    The committee thanked the Joint Technical Committee (JTC) and the OPEC secretariat for their contributions to the meeting, while the next conference of the JMMC is scheduled for March 3, 2021.

    Meanwhile, oil price rose to $58 per barrel yesterday hitting over 11-month high, after major producers showed they were cutting crude output in line with their commitments on restraint.

    Brent crude was up $58.71, a 2.18 per cent increase, while US oil gained 2.36 per cent to hit $56.86 a barrel.
    Crude production by the OPEC increased for a seventh month in January, after the cartel and its allies agreed to ease supply curbs further, but the growth was smaller than expected.

    OPEC Secretary-General, Dr Sanusi, Barkindo, expressed delight about the new development at the opening of the OPEC+ panel meeting on Tuesday.

    “With the crude oil market currently switching into backwardation, we are hopeful that 2021 will be a good year for overall demand,” Barkindo said.

    House: $20bn Crude Oil Unaccounted for in Eight Years

    The House of Representatives Ad-hoc Committee on Crude Oil Theft, yesterday said crude oil worth over $20 billion could not be accounted for between 2005 and 2012.

    The Chairman of the Ad-hoc Committee, Hon. Peter Akpatason, during the resumed hearing of the committee in Abuja added that the same infractions were observed between 2016 and 2019.

    He stated that the amount was arrived at after a forensic audit the committee commissioned.

    Besides, the House Committee on Public Accounts also said it uncovered over N5 billion waivers illegally granted to China Harbour on imported construction materials.

    Akpatason told the gathering that the committee resolved to resume the investigation on crude oil theft in Nigeria, having gone through submissions from stakeholders in the sector.

    He said while the committee was not set up to witch-hunt any organisation, it would ensure the trial of anyone found culpable.

    ”The effects of crude oil theft cannot be overemphasised, and this has lasted for too long. As patriots, it is our collective responsibility to see to the end of this stealing. The ad-hoc committee has identified the key role DPR as the agency of government in the sector hence your re-invitation today to enable us to work together and come up with a common front on ways to tackle this matter and if not completely put an end to it, reduce it to its barest minimum.

    “DPR is the agency of government saddled with the responsibility of monitoring crude oil production and lifting. The committee requested and obtained schedules of crude oil produced and lifted between 2005 to 2019.

    “Forensic analysis of the data revealed a very wide margin between what was reported produced and what was lifted. Between 2005 and 2012, DPR reported production of 1,746,621,167 barrels from four sampled oil terminals of Escravos, Bonny, Forcados and Bonga.

    “Out of these production volumes, only 1,417,200,848 barrels were accounted for, as having been lifted officially. A whopping volume of 329,420,319 barrels, valued at over $20 billion, could not be accounted for. The same trend of infractions was observed in the years 2016-2019.

    “The committee through the analysis of submissions to the committee has raised issues requiring clarifications from DPR these issues range from unprocessed crude oil, suspected stolen/diverted crude oil, discrepancies in records, use of inappropriate devices and technologies for measurement and gauging despite huge budgetary provisions. During the analysis, the committee made discoveries that require clarifications from major stakeholders,” he added.

    In his presentation, Director of the Department of Petroleum Resources, Mr. Sarki Auwalu, blamed crude theft on third party interference, particularly at the land terminals.

    He said: ”The problem is that we have 30 terminals in Nigeria and these terminals, five are land terminals. Most of the thefts, they are coming from land terminals because the land producers, they have to use pipelines to transport the crude into the terminals for export. In the process, you have a lot of third party interferences in which those points of theft were there; small volumes that account for the larger volume are being taken and they are being stolen.

    ”So, most of the discrepancies in production and export, you can easily calculate the theft volume. And the theft volume, if not all, come from the land terminals. But the offshore terminals, it is actually practically impossible to steal crude from offshore terminals, since it is from the bottom of the sea.”

  • Oil prices edge higher on output cuts, COVID-19 weighs

    Oil prices edge higher on output cuts, COVID-19 weighs

    Crude oil prices rose on Tuesday, supported by production cuts in the U.S. Gulf Coast as Tropical Storm Laura was forecast to become a major hurricane.

    Also, rising coronavirus cases in Asia and Europe capped gains.

    Brent crude oil futures added 37 cents, or 0.82 per cent, to $45.50 a barrel by 1048 GMT and U.S. West Texas Intermediate crude rose 15 cents, or 0.35 per cent to $42.77 a barrel.

    “Overall, hurricanes may be limiting supply this week, helping prices maintain and even slightly hike their levels.

    “But the market will soon again focus on the biggest hurricane of them all, COVID-19,’’ Bjonar Tonhaugen, Head of oil markets at Rystad Energy, said.

    “The demand recovery…and indications of how the pandemic develops are what will really determine the direction of the market.’’

    Energy companies cut production at U.S. Gulf Coast oil refineries on Monday after shutting 82 per cent of the area’s offshore crude oil output as a rare double-storm assault on U.S. oil regions threatened heavy rains and strong winds.

    However, the risk of a major double hit has lessened.

    Storm Laura was still expected to become a major hurricane but storm Marco has weakened and was likely to dissipate by early Wednesday, the National Hurricane Centre said.

    Producers have shut more than 1.5 million barrels per day of Gulf Coast offshore oil production, nearly 14 per cent of the nation’s total output.

    A U.S. infectious diseases specialist said on Monday that rushing out vaccines could undermine trials of other promising candidates, following a boost to markets after U.S. regulators authorised the use of blood plasma from recovered COVID-19 patients as a treatment.

    Europe is also seeing a rise in coronavirus cases, including re-infection.

    Two re-infections were reported in Europe and one in Hong Kong this week.

    Elsewhere, U.S. and Chinese trade officials have reaffirmed their commitment to a Phase 1 trade deal, giving a boost to financial markets on Tuesday.

    Meanwhile U.S. crude oil stockpiles likely fell for a fifth straight week, while refined product inventories also decreased last week, a preliminary Reuters’ poll showed on Monday.

  • Oil price falls to $22, lowest in 18 years

    Oil price falls to $22, lowest in 18 years

    The international oil benchmark, Brent crude, plunged to its cheapest in 18 years on Monday as it traded around $22 per barrel.

    This comes amid growing fears that the global coronavirus shutdown could last months and demand for fuel could decline further.

    Brent crude, against which Nigeria’s oil is priced, fell by $2.83 to $22.10 per barrel as of 5:05pm Nigerian time on Monday. It earlier tumbled to as low as $21.76 per barrel, its lowest since March 2002.

    The sharp drop in crude oil prices following the spread of the coronavirus pandemic has forced the Federal Government to propose the reduction of the oil price benchmark for the 2020 budget to $30 from $57.

    With Saudi Arabia and Russia set to flood the market with oil next month, producers and shippers were said to be scrambling to lock oil up in storage as demand fell due to the pandemic.

    Despite the significant reduction in its official selling prices aimed at wooing buyers, Nigeria is still struggling to sell its crude oil as Indian refiners are cutting back on output while European plants are considering closures.

    The Nigerian National Petroleum Corporation was reported last week to have cut its April official selling prices for Bonny Light and Qua Iboe, two of the nation’s major grades, by $5 per barrel to dated Brent minus $3.29 and minus $3.10 per barrel respectively.

    The dual shocks of the price war and the demand slump have kept oil prices under pressure, with Brent crude shedding over 60 per cent of its value.

    According to analysts, the price of oil is now so low that it is becoming unprofitable for many oil firms to remain active, and higher-cost producers will have no choice but to shut production, especially since storage capacities are almost full.

    Rystad Energy’s Head of Oil Markets, Bjornar Tonhaugen, said, “The oil market supply chains are broken due to the unbelievably large losses in oil demand, forcing all available alternatives of supply chain adjustments to take place during April and May.”

    Goldman Sachs analysts said demand from commuters and airlines, which account for about 16 million barrels per day of global consumption, might never return to previous levels.

    Collapsing oil prices are costing Nigeria and other producers not only lost revenue when they most need it to tackle the coronavirus crisis, but also market share they may never recoup, Reuters reported on Monday.

    According to the report, members of the Organisation of Petroleum Exporting Countries such as Nigeria, Angola, Algeria and Venezuela cannot compete with the lower costs of Saudi Arabia and Russia, who are flooding the market.

  • Nigeria faces economic pressures as oil price falls to $24

    Nigeria faces economic pressures as oil price falls to $24

    Nigeria is apparently facing a hard time as oil price slumped further to $24, its lowest in seventeen years.

    The Brent crude fell by $3.84 to $24.89 per barrel as of 7.05 pm Nigerian time on Wednesday, its lowest level since late 2002.

    This continuous fall in prices is a fallout of the ongoing price war between Saudi Arabia and Russia.

    With the oil price now more than 50 per cent lower than Nigeria’s budget benchmark, the country’s oil-dependent economy has come under more pressure.

    The 2020 budget, which was signed by the President, Muhammadu Buhari, in December, was based on oil production of 2.18 million barrels per day with an oil price benchmark of $57 per barrel.

    The Federal Government was looking to generate N2.64tn oil revenue, representing 32.34 per cent of expected total revenue for this year, with non-oil revenue projection being N1.80tn.

    The price war between Saudi Arabia, the de facto leader of the Organisation of Petroleum Exporting Countries, and Russia after the collapse of talks on coordinated output cuts is increasing pressure on the market, according to Reuters.

    Travel and social lockdowns aimed at countering the coronavirus were said to have raised prospect of the steepest ever annual fall in oil demand.

    Investment banks and consultancies have been making heavy cuts to their demand forecasts as a growing number of the world’s largest cities and economies restrict movement.

    “The oil demand collapse from the spreading coronavirus looks increasingly sharp,” Goldman Sachs said in a note, forecasting a fall in Brent prices to as low as $20 in the second quarter, a level not seen since early 2002.

    The bank expects a demand contraction of eight million barrels per day by late March and an annual decline in 2020 of 1.1 million bpd, which it said would be the biggest on record.

  • COVID-19: Oil Price Drop, Wake up Call to Nigeria – Omo-Agege

    COVID-19: Oil Price Drop, Wake up Call to Nigeria – Omo-Agege

    The market slump of crude oil price due to the global outbreak of Coronavirus pandemic is a wake up call for Nigeria to look towards a life without oil, Deputy President of the Senate, Senator Ovie Omo-Agege has said.

    This, according to him, would require bold policy changes to restructure the country’s mono-product economy.

    Speaking as Guest of Honour at the 50th anniversary of the Nigerian Military School, Zaria, 1970 Set, Senator Omo-Agege also called on the old students to fashion out creative solutions to the challenges confronting the country.

    He said: “The recent global outbreak of the COVID-19… obviously poses peculiar challenges, not only for personal health, but also for the economy and business. As we have seen already in the global oil and foreign exchange markets, these are frightening challenges that we must solve.

    “Although the present administration has taken bold measures to stave off the outbreak from our shores, I am sure this global threat remains in the mind of every one of us here.

    “We need to deal with the sharp drop in global oil prices and its impact on the 2020 budget and the exchange rate, and by implication, on the short, medium and long-term health of the economy.

    “We will get through this, but it is going to require, more than anything else, bold policy changes to restructure the economy because it is still too dependent on crude oil.

    “And this would necessitate some drastic changes in our ways of life. It will not be easy. I am very optimistic however, that we can do it. And my optimism about Nigeria going forward is in part because we have people like you who have the discipline associated with your Alma Mata”.

    Recall that, last week, the Senate constituted a joint committee on Finance, National Planning and Appropriation to engage relevant federal ministries on the recent oil price crash.

    This followed a Point of Order raised by the Senate Majority Leader, Senator Abdullahi Yahaya.

    The Delta Central lawmaker, who also chairs the Senate Committee on Constitution Review, revealed that the panel would soon receive memoranda from Nigerians on the Fifth Alteration of the 1999 Constitution.

    “I am glad to inform you that the 9th National Assembly has boldly taken up the gauntlet. Electoral reforms, Petroleum Industry Bill and reforms in the budgeting process are of special interest to the National Assembly.

    “Recently, a Constitutional Review Committee of which I am honoured to be Chairman was set up by the 9th Senate. We have begun work on this important national assignment. How far-reaching this will be, depends on all of us. Soon, we will be having public hearings, as well as receiving memoranda. It is my hope that you will avail us your experience in this regard,” he stated.

    He therefore called for support for the ongoing reforms of the Muhammadu Buhari administration, aimed at achieving sustainable economic growth for Nigerians.

  • FG targets budget cut as projected oil price heads for $20

    FG targets budget cut as projected oil price heads for $20

    Due to the volatility of oil prices at the international market, the Federal Government, has announced plans to cut its 2020 budget.

    Recall that President Muhammadu Buhari, in December, signed a N10.59 trillion 2020 budget, on the assumption of oil production of 2.18 million barrels per day with an oil price benchmark of $57 per barrel.

    However, oil prices had plummeted by over 25 percent, forcing future to its lowest in years, as Brent crude benchmark fell from $45 a barrel to $36.32 as at 6:00pm yesterday, while WTI fell from $40.45 to $32.97.Latest projections by Goldman Sachs yesterday, showed that the oil market is heading into a whole different era now that Saudi Arabia and Russia are squaring off in an all-out oil price war following Friday’s failed OPEC+ agreement, thus making $20 Brent Crude a real possibility.

    The Minister of Finance, Zainab Ahmed, speaking in Abuja yesterday after a meeting with Buhari, said a committee, including herself, the Minister of State for Petroleum Resources, the Group Managing Director (GMD) of the NNPC and the Central Bank governor would determine the size of the budget cut in the coming days and revisit the benchmark crude oil price of $57 a barrel used to calculate the budget.

    However, the Lagos Chamber of Commerce and Industry (LCCI), through its Director-General, Muda Yusuf, said a fall in oil price has implications for the level of fiscal deficit in the budget, as its implementation would be constrained; infrastructure financing affected; borrowing might increase, and the capacity to fund capital project would be severely constricted.

    With this scenario, the outlook for oil-dependent economies looks rather gloomy, he added.Oil prices plunged by 10 per cent on Friday after OPEC and its Russia-led non-OPEC allies failed to agree on how to handle the depressed demand amid the Coronavirus outbreak.

    The Saudis and OPEC insisted on a massive 1.5-million-bpd cut through end-2020, but Russia refused to continue ceding more ground and market share to U.S. shale with the OPEC+ production cut deal, which hadn’t materially moved oil prices higher, especially with the slump in demand due to the epidemic.

    As oil price yesterday fell to what could be described as the worst in about three decades due to rivalry between Saudi Arabia and Russia, industry analysts said Nigeria and the global economy might not recover quickly from the shocks.

  • Nigeria in serious trouble as Oil price falls to $31 after Saudi Arabia triggers price war with Russia

    Nigeria in serious trouble as Oil price falls to $31 after Saudi Arabia triggers price war with Russia

    Oil fell by the most since 1991 on Monday after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak.

    Brent crude futures fell by as much as $14.25, or 31.5%, to $31.02 a barrel. That was the biggest percentage drop since Jan. 17, 1991, at the start of the first Gulf War and the lowest since Feb. 12, 2016. It was trading at $35.75 at 0114 GMT.

    U.S. West Texas Intermediate (WTI) crude fell by as much as $11.28, or 27.4%, to $30 a barrel. That was also the biggest percentage drop since the first Gulf War in January 1991 and the lowest since Feb. 22, 2016. It was trading at $32.61.

    Saudi Arabia, the world’s biggest oil exporter, is attempting to punish Russia, the world’s second-largest producer, for balking on Friday at production cuts proposed by the Organization of the Petroleum Exporting Countries (OPEC).

    OPEC and other producers supported the cuts to stabilise falling prices caused by the economic fallout from the coronavirus outbreak.

    Saudi Arabia plans to boost crude output above 10 million barrels per day (bpd) in April after the current supply deal between OPEC and Russia, – known as OPEC+ – expires at the end of March, two sources told Reuters on Sunday.

  • Trouble ahead for Nigeria: Oil prices could fall to $40 in 2020

    Oil prices forecast to fall southwards to about $40 per barrel in 2020, without output cuts.

    It’s bad news for Nigeria and other OPEC countries and Russia as they meet in Vienna on 5 December to discuss output levels for next year.

    The market forecast for next year is grim: unless OPEC countries agree to cuts in output, prices could go southwards to as low as $40. Making the forecast is Rystad Energy as it predicts a substantial build of global crude stocks and a corresponding drop in oil prices, if output cuts are not agreed.

    “We have a clear message to the OPEC+ countries: A ‘roll-over’ of the current production agreement is not enough to preserve a balanced market and ensure a stable oil price environment in 2020,” says Bjørnar Tonhaugen, head of oil market research at Rystad Energy.

    “The outlook will be bleak if OPEC+ fails to agree on additional cuts.”

    And it also spells bad for Nigeria if prices fall below $57, the benchmark for the 2020 budget. Facing severe cash-crunch, Nigeria is betting on oil income flow to implement the budget of N10.3trillion($28billion).

    According to Rystad Energy’s estimates, the global oil market will be fundamentally oversupplied to the tune of 0.8 million barrels per day (bpd) in the first half of 2020.

    Empirical evidence has demonstrated that a 1 million bpd surplus of oil can be expected to cause an oil price decline of around 5% per month, implying a potential drop of 30% over six months.

    “If OPEC and Russia don’t extend and deepen their cuts, we could see Brent Blend dip to the $40s next year for a shorter period,” Tonhaugen said.

    “In order to ensure a balanced market, our research indicates that OPEC would need to reduce crude production to 28.9 million bpd – a drop of 0.8 million bpd from the level seen in the fourth quarter of 2019-levels – given our forecast for demand, non-OPEC supply and the impact of new IMO 2020 regulations on global crude runs,” Tonhaugen added.

    “Despite decent cut compliance from the group as a whole and large involuntary declines in Iran and Venezuela this year, OPEC’s current crude production of about 29.7 million bpd is far above the ‘call’ for 2020. Alas, without deeper cuts taking effect in January 2020, large global implied stock builds are on the cards,” Tonhaugen remarked.

    Rystad Energy sees three alternative OPEC+ decision scenarios:

    **Base case: Extension of current production cuts to June 2020. Global oil market will be oversupplied to the tune of 1.2 million bpd in 2020. Significant oil price correction, possibly down to the low $40s for a short period, is likely.

    **Deeper cuts: Additional cut of 0.75 million bpd on top of the 0.3 million bpd in the extension scenario would reduce the supply overhang and ensure stable prices.

    **No deal/market share war: A ramp-up to maximum production capacity in all countries could have devastating effects. With potential stock builds of 2.3 million bpd, oil prices could fall below $30/bbl – lower than during the previous lows of 2016. Such a scenario would be devastating for the forward curve structure as potential stock builds would be larger than what we have observed historically

    *Adapted from a report by oilprice.com