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The global oil market is facing a severe shortage of crude oil due to Saudi Arabia’s decision to cut production amid a rise in demand, according to estimates published by the Organization of Petroleum Exporting Countries on Thursday.
The global market will be lacking about two million barrels daily needed to meet demand in the current quarter, OPEC said in its monthly report.
It comes after the oil cartel had initially forecast a shortfall of this magnitude for the end of the year.
Saudi Arabia, a top oil producer, recently announced that it would cut its daily production by one million barrels in August, extending a unilateral reduction by another month in a bid to boost prices.
Russia, another oil-producing heavyweight, has also said it would reduce oil exports by 500,000 barrels per day in August. The two countries lead the larger OPEC+ group, which consists of over 20 oil-producing nations and includes non-OPEC members like Russia, Kazakhstan and Oman.
According to OPEC’s monthly report, the group expects global demand for crude oil to average 102.0 million barrels per day this year.
This means that demand will increase by 2.4 million barrels per day compared to the previous year. The oil cartel has not changed its previous forecast on the development of demand.
For 2024, OPEC experts forecast demand to average 104.2 million barrels per day.
Most recently, supply concerns in particular had led to a sharp increase in oil prices, with Saudi Arabia’s and Russia’s plans to cut production driving up prices for crude oil from the North Sea and the US. In the course of the week, prices reached their highest level in nine months.
source: dpa
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