OPEC+ Slimming Down Projections for Oil Market Surplus in 2023

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……. “If meets its August quota by the end of August it would add to market surplus that OPEC+ group sees.”

Ahead of the OPEC+ meeting taking place today (Tuesday), a report has been cited showing that the OPEC+ group now sees the oil market surplus at 1 million bpd this year – down from their previous estimates of 1.4 million bpd.

The lowering of crude oil surplus projections comes as the OPEC+ group continues to produce under its quota. OPEC+ agreed to its production in May by 432,000 bpd, Reuters said last night quoting an document it cited.

But the group was unable to reach this target, undershooting it by 2.7 million bpd. For June, the OPEC+ group again agreed to lift its production by another 432,000 bpd, but the general consensus in the industry is that they will be unable to meet that quota too.

For July and August, the OPEC+ group got even more ambitious, raising their output targets by an even greater extent, essentially rolling the September that they had planned into July and August.

But OPEC+’s continued underproduction will shrink any anticipated market surplus, if indeed OPEC+ is using these production figures in their estimates.

One of the biggest laggards in the production cut deal all along has been Nigeria, which actually had its production decrease in May instead of per the quota.

The result was a half a million barrel a day shortfall in its actual production vs. its quota. But ’s oil minister last week said that it would be able to meet its production quota by the end of August.

If manages to reach its production quota by the end of August when the OPEC+ quotas have been fully rolled back, it would go a long way to adding to that market surplus that the OPEC+ group sees.

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