Bloated oil stock inventories aren't depleting as expected: Analyst
|Oil prices have declined by over 10% this month amid signs the market isn't rebalancing or tightening as fast as expected by major producers four months ago.
"There were some major assumptions built-on where demand and the recovery would be now, and it just hasn't happened. If I'm OPEC and if I'm Saudi Arabia, I would be concerned," Mohammad Darwazah, an analyst at research firm Medley Global Advisors LLC told Bloomberg.
OPEC+, a loose group of major producers led by Saudi Arabia and Russia, began reducing output by 9.7 million barrels per day from May 1. The output cut deal was revised lower to 7.7 million barrels per day in August.
Even so, the market remains oversupplied with demand recovery from the coronavirus pandemic faltering. According to Bloomberg, trading houses are hiring oil tankers on long-term contracts once again to store surplus barrels.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.