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NEXT week the oil organization will meet to decide on the fate of the direction of the oil price. Consumers are anxiously waiting for positive news with regard to more oils to come to the market, perhaps in the range of 500,000 barrels per day from next week. No time should be wasted. OPEC+ should do the right thing and let the prices be free without being held captive by the organization and depriving its consumers from their needs and requirements. The same message should go to the American shale oil producers in terms of pushing for more production and being satisfied with the margins they are making without being greedy.
The oil price is close to $ 80 a barrel, and it is time to act responsibly and meet the demands of the market and the consumers. There is no doubt that the impact of environmental and climate campaigners are perhaps pushing too hard in creating such a shortage and demand for oil and gas, which has in turn led to the hardening of the oil prices. Now the oil consumers and producers alike are struggling to find and search for oils. With investments in hydrocarbons reaching a low level to 50 percent in the last 10 years, capital spending has resulted in constraints in supply, forcing OPEC and its partners to face the pressure of meeting the market demands.
Next week is an opportune time to analyze the oil market, monitor it, and observe the level of demand for it to reach above the level of 95 million barrels. That could leave OPEC+ to its brim. Here we shall witness the severity of the demand and how far OPEC+ can manage in leaving the oil taps wide open, thus easing the pressure on oil prices or otherwise. Or else, the consumers should brace themselves for real tightness in supply and a real shortage. This would be a clear sign for investors to pour more capital into the industry – both oil and gas combined. At a time, the International Energy Agency was calling for a stoppage in investments in oil and gas and pushing towards zero carbon emission by 2050. The same happened with international oil companies with pressure from their shareholders to stay away from oil and gas, leading to perhaps more distress in prices. For OPEC+, our message is to push or pump more oils for your consumers. Do not let them down… It is not their doing.
By Kamel Al-Harami
Independent Oil Analyst