International, oil price decrease

The fall comes after downward revisions by the OPEC, of the crude oil demand forecast for the whole year, weighed down by the lower than expected dynamism of the Chinese economy. The weakness of consumption together with the increase in production in countries outside the cartel – mainly United States, Brazil, Canada and Guyana– will lead, according to most estimates, to excess capacity next year. This scenario, if it materialises, places the so-called OPEC Expanded (OPEC+) in a difficult situation.

At a meeting in June, the cartel agreed to gradually ease the quota system starting in September, a move that would add 2,2 million barrels a day by the end of next year. However, last week the organization agreed to postpone the production increase until November, a move that has not caused significant changes in the price. Nevertheless, some investment banks, such as Goldman Sachs and Citibank, have recently revised their forecasts downwards and, as of today, do not rule out the possibility that the price will be close to $60 a barrel over the next year.

Source: CESCE