Earlier the agency expected such a drop in production in April, now the deadline has shifted to May onward and the current forecast for April assumes a decline of 1.5 million bpd.
OPEC’s monthly market report also lowered the estimate of Russian production in 2022 by 530, 000 bpd, although growth is still expected compared to the 2021 levels.
According to Reuters, the actual decline in Russian production for the period from April 1 to April 11 reached 0.7 million bpd.
Last week, the EIA reported that crude oil inventories had added 9.4 million barrels in the week to April 8, significantly surpassing analysts’ estimates of 0.863 million barrels.
On the other hand, total supplies of petroleum products in the US, an indirect indicator of demand, decreased by 1 million bpd in the week to April 8, to 18.8 million bpd.
The increase in crude oil inventories is largely due to a reduction in oil refineries’ output and release from the SPR.
With the EU currently discussing potential oil sanctions on Russia, OPEC’s Secretary General Mohammed Barkindo said this could lead to the loss of more than 7 million bpd and that it would be “nearly impossible” to replace all these barrels.
Rising oil prices indicate that the market is not fully aligned with the official EIA statistical data and the assessments of OPEC and IEA.
First, OPEC+ countries do not fulfill their obligations to increase production as planned.
Second, the IEA’s calm attitude to the reduction of supplies from Russia causes a lot of doubts among traders.
At the moment, the release of SPR to the market is planned only in May and June, the increase will be only 1 million bpd.
To sum up, there are still too many risks in the global energy market to seriously talk about imminent oil price decline.
He held senior analyst positions at OPEC, IEF in Riyadh, and OPEC FUND for International Development.