*UAE’s Breach of OPEC Output Pact Shakes Oil Traders’ Faith*
Just as OPEC+ seemed to have output quotas under control, the UAE has admitted to oversupplying in both July and August amidst uncertain pricing level for the crude benchmarks. This has traders wary of what the rest of the year will bring according to Bloomberg with questions over the output levels that are due to be decided on 17th September in OPEC’s next quota meeting, as it raises questions about the sustainability of the cuts programme as a whole.
* OPEC Confronts a Precarious Coronavirus Oil Future*
With OPEC turning 60 years old, it has been dealt its toughest test to date, with the suppression of oil prices linked to flailing demand of crude and its products, it is only a test of time whether OPEC is really able to stabilise pricing levels and protect both producers and consumers according to S&P. At its peak, OPEC nations controlled almost half of global supply, that fell off to only a third, meaning it had to look to collaborate with nations like Russia to retain its effectiveness.
*COVID-19 Puts Breaks on oil Demand – Vitol exec*
Vitol CEO confirms the sentiment in the market of unpredictable demand that is causing global recoveries to falter with Jet fuel being one of the worst products hit due to the airline industry effectively ground to a halt, with short haul flights at 50% of standard levels and long haul at 30%, leaving supplies well above normal levels.
*Global Oil Demand May Have Peaked: BP*
BP’s latest energy outlook reports that global oil demand may have already peaked with demand possibly falling to levels of 55 million bpd, half the current demand. It is thought that the slowdown in demand could be a catalyst to a turn towards greener energies as many NOC have pledges a commitment to the renewable forms within the next few decades.