Demand concerns and reluctant OPEC+ weigh on the market

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OPEC,Energy,Commodities

This skeptical assessment is primarily due to growing demand concerns after economic data from the three most important oil demand regions – the US, China and Europe – disappointed and led to an increase in risk aversion, Commerzbank’s Commodity Analyst Carsten Fritsch notes.

The extent of the price decline seems to be exaggerated “As a result, the stock markets and other cyclical commodities such as base metals also came under pressure. There are growing doubts as to whether oil demand will actually increase noticeably in the second half of the year, as had previously been expected. But there were also headwinds on the supply side.

” “OPEC+'s reluctant stance rather gives the impression that the cartel members still want to increase production. The diminishing willingness to maintain the current production cuts is also fueled by the continued overproduction of individual members such as Iraq and Kazakhstan. Thus, in two months at the latest, there is a risk of a repeat, although there will no longer be any scope for an increase in production in view of the implicit market balances for 2025.

 

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