The international market of crude oil is still seeing some volatility. In particular, a barrel of Brent oil now costs around $53. This was accompanied by a statement made by the Secretary General of OPEC during his speech in Kuwait. He assumes that the global demand for crude oil is going to increase in the near future.
At the same time the Secretary is convinced that non-OPEC oil exporters are going to cut their oil supplies in the near future. Anyway, there are several factors indicating that the situation is changing for the better for OPEC.
At the same time, experts assume that in longer-term perspective, the global demand for crude oil demand is going to grow as well. Specifically, preliminary estimates show that the global demand may increase all the way up to 110 million barrels a day by 2040.
The Secretary General of OPEC also hopes that 2016 is going to be the year of more balanced oil prices. Not so long ago, there emerged several indications that some oil exporters might be secretly cutting their oil production. However, it should be noted that it is all about non-OPEC oil exporters. If the global demand is indeed moving higher when coupled with production cuts, this is going to be a decent reason for oil prices to stabilize and then rally.
Still, Masterforex-V Academy says that this is not going to happen over the next couple of months since the oversupply is still way too big. Specifically, the current global oil inventories are much higher than the 5-year average. That’s why OPEC is focused on longer-term expectations of higher oil prices.
At this point, the global production of crude oil is estimated at 75 million barrels a day. Preliminary estimates show that the gap between the global supply and demand of crude oil is not going to narrow considerably until Q3 2016. Still, time is not the only factor required to balance the market. Considerable efforts in the right direction will be needed as well.
