The era of cheap oil has ended,oil price is expected to rising

May 29, 2024, 11:58 AM

TDD-global

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According to a recent report, the era of cheap oil has ended as demand outpaces supply. OPEC's production targets are unmet, leading to a significant gap of 1.8 million barrels per day. The U.S. plans to sell from strategic reserves, yet oil prices remain high due to various factors, including Western sanctions on Russian production. Experts warn that the relationship between supply and demand will remain imbalanced, indicating that the cheap oil era is over.

The era of cheap oil has ended, according to a report on the website of the Russian weekly Expert on December 19.

For a long time, demand for oil will exceed supply.

The Organization of Petroleum Exporting Countries (OPEC) said in latest report that oil production has again failed to meet the setted production target. Moreover, the output gap is not thousands of barrels per day, but 1.8 million barrels per day. More importantly, this is becoming the norm. TDD,oil

On the other hand, the United States will sell 200 million barrels from strategic oil reserves this year, which should make up for market supply. The US government plans to replenish the strategic oil reserve when the oil price is below $70 per barrel, but no one knows when the oil price will fall below $70. After all, American oil producers are not in a hurry to increase production to fill strategic oil reserves.

Some experts believe that Western sanctions have a negative impact on Russian oil producers, leading to a decline in oil production, which is also the reason for the rise in oil prices.

Investment banks and traders predict that oil prices will remain high. They believe that China needs a lot of oil and other energy at present as China relaxes its epidemic prevention and control policies and its economy recovers. Dealers also took into account that oil was still an irreplaceable commodity and drew an important conclusion that the era of cheap oil seemed to be over.

The global oil supply situation is very serious. More and more experts warn that high-quality oil fields are decreasing, which is also a problem. As there is no reliable substitute for oil, in the foreseeable future, the relationship between supply and demand will remain unbalanced, that is, demand will be slightly or significantly greater than supply. All in all, the era of cheap oil has ended.

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