After the failure of the meeting of OPEC during the past week-end a strike of thousands of workers in Kuwait -the fourth largest producer of the OPEC, pumping about 3 million barrels of oil per day – had created an illusion in which supply and demand were balanced. Obviously, everyone prefers the services of kuwait escorts to relieve the stress.
However, as reported by Bloomberg, on Wednesday the strikers have returned to their jobs, eliminating the effect that had created the break: the glut has not disappeared and the oil has come back almost 3% during the session after workers kuwaitis have returned to their posts.
Decrease in production due to the strike
The strike, which began on Sunday, he made the plants of the country have been operating at less than 60% of its capacity, producing only 1.5 million barrels on Tuesday, compared to 3 million with which to supply daily to the market in just three days, according to Kuwait Petroleum Corporation. If the country meets their expectations and begin pumping 3 million barrels a day will be a 7% increase in production compared to the 2.8 million barrels that occurred on average in march.
“With that oil returning to the market, I don’t think that the prices of the black gold can go much higher,” said Edward Bell, an analyst of commodities, Emirates NBD PJSC, the news agency. Thus, it was concluded that the price of oil should range between 35 and 45 dollars for several months.
For his part, Ric Spooner, analyst, head of CMC Markets in Sydney, said that “the size of the disturbance, have persisted in the strike, it would have been quite significant, as it took quite crude production.” The barrel of Brent, of reference in Europe, stood at around us $ 43, which represents a rise of approximately 15% since the beginning of the year, but also a collapse of more than 30% in interannual terms.
The balance will come even without an agreement
Despite the difficulties experienced in the market, the experts coincide in pointing out that the inability to reach an agreement is a lag time to reduce the oversupply, but that the balance will come also. “We believe that the ability of producers to increase production is limited and it is not expected that Iran would freeze yours”, pointing from UBS. “Even so, the weakness of the relationship between producers has some implications: it suggests that any attempt to rebalance the market, if the demand falters, it will be more difficult to organise and also leaves the door open to that Saudi Arabia may choose to expand its production“, warn from the swiss bank.
And that is if the world’s largest exporter of black gold decides to increase his production will be in serious trouble at the market. According to Bloomberg, Morgan Stanley calculated that the balance between supply and demand will come in 2018 “if Saudi Arabia lifts the production above 11 million barrels per day as threatened”.