A high demand for petrol in the United States should help drive up summer oil prices, according to OPEC’s latest monthly report.
The Monthly Oil Market Report (MOMR) analyses the dominant issues affecting the global oil market and attempts to forecast developments in the coming year, including the balance between supply and demand.
Despite a weak demand for gasoline in the US for the early part of the year, the MOMR points to an increasing demand, with it being 9.3 million barrels a day higher than it was in the same month last year. Some 20 million barrels have also been taken off US gasoline inventories since the end of January.
Overall, oil prices have managed to stay above $50 a barrel since OPEC and its partners announced a supply cut last year. Global production stood at just 31.9 million barrels a day last month, due in large part to reduced supply from Iran, the UAE, Nigeria, and Libya. This compares with a predicted global demand of 32.3 million barrels a day, so the current excessive stockpiles should start to diminish as refiners maximise throughput to meet the increase demand for crude oil products, which include not just petroleum but also engine oils like Q8 T750 15W/40.
All eyes will be on OPEC’s next meeting on May 25, when the cartel is expected to extend the current production cuts rather than jeopardise the market’s fragile recovery and see oil prices drop to $40 a barrel once more.