OPEC says release of crude reserves could increase surplus in 2022

File photo of the OPEC logo at the group's headquarters in Vienna

File photo of the OPEC logo at the group’s headquarters in Vienna

By Ahmad Ghaddar

LONDON, Nov 24 (Reuters) – OPEC estimates the U.S.-led release of oil from major consuming nations’ reserves will exacerbate a global market surplus in 2022 by 1.1 million barrels per day (bpd), said a source in the group.

The Economic Commission Board, a group of OPEC technical experts, met this week ahead of a ministerial meeting of the OPEC + alliance on December 2 that is scheduled to decide whether the producer group goes ahead with a planned increase in prices. supplies.

The panel predicts that the oil market will have a surplus of 400,000 bpd in December, and that the surplus will expand to 2.3 million bpd in January and 3.7 million bpd in February if consuming nations follow through with their plans. to release reserves, the source said on condition of anonymity.

The United States said on Tuesday it would release up to 50 million barrels of oil from its emergency reserves, in coordination with other injections of crude from the United Kingdom, China, India, South Korea and Japan, with the aim of cooling prices after that OPEC + ignored requests to pump more crude.

Goldman Sachs estimated the total size of the release at 70-80 million barrels, less than a day’s volume of global consumption, and described the move as “a drop in the ocean.”

OPEC + has resisted repeated calls from the government of President Joe Biden to accelerate production increases as it undoes its supply cuts, which will stand at 3.8 million bpd by the end of December.

The export bloc has been raising production targets by 400,000 bpd every month since August, saying those volumes were sufficient because it expects the oil market to run a surplus next year.

Some market analysts, including JP Morgan, have suggested that OPEC could halt production increases after announcements about stocks from major consumers.

OPEC + sources told Reuters the group has not yet started discussions on pausing a planned production increase in January despite the release of reserves.

(Reporting by Ahmad Ghaddar in London; Additional information by Brijesh Patel in Bengaluru. Edited in Spanish by Marion Giraldo)

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