Those from the oil market who fear a strong increase in OPEC production next year should make things better, prepare for a supply shortage, warns CitiGroup.
Five member-countries of OPEC, Libya, Nigeria, Venezuela, Iran and Iraq may already reach their peak in terms of productiokn, says Citigroup strategist Ed Morse.
Rather than a strong growth in production, there is a risk of confronting with some market pressures in 2018, generated by those countries affected by a strong collapse in exploration and development.
“There is an obvious evidence that not international oil companies, but OPEC countries are behind investments”, added Morse.
Oil prices continued to rise yesterday, with Brent nearing $60 per barrel, against a background of robust worldwide demand and a threat upon the Kurdish oil exports.
“Demand was underestimated month by month,” said Adi Imsirovic of Gazprom Marketing and Trading. “Stocks melt”.
Most of the demand comes from Asia, with international forecasters expecting a level of 1.6 million barrels per day.
Consumption of industrialized countries is also growing for the first time in nearly a decade.
Ben Luckock, Trafigura’s executive, says the oil market is at a turning point and estimates that prices will remain in a tight range of $ 40-60 will not materialize.
Oil prices have also been backed by Turkish Prime Minister Recep Tayyip Erdogan’s threat of blocking the pipeline carrying crude oil from northern Iraq to foreign markets in response to the referendum on independence in Kurdistan.