The new normal price of Brent Crude may be $ 75-80 per barrel.
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New Delhi: JM Financial Institutional Securities has said in a report that the new normal price of Brent crude may be around $ 75-80 per barrel. The IEA expects voluntary cuts by OPEC Plus from May this year until the end of the year. “We believe that OPEC+ production cuts will keep Brent crude prices around $75-80 per bbl, which is the fiscal break-even crude price needed for Saudi Arabia,” the report said. The pricing power of OPEC Plus has strengthened in the last 2-3 years due to the following reasons.
US oil production continues to decline at 12.3 mmbpd, compared to the pre-Covid peak of 13.1 mmbpd. OPEC Plus has shown strong potential to cut production by 10 mmbpd in early calendar year 2020 to offset a 10 percent drop in global oil demand post-Covid. OPEC Plus still has room to cut production by another 4-5 mmbpd. Russia’s oil exports increased by 0.6 mmbpd to 8.1 mmbpd in Mar’23 due to increase in oil product exports.
Russia’s oil exports increased by 0.6mmbpd to 8.1mmbpd in Mar’23 (after a decline of 0.5mmbpd in Feb’23), the highest since April 2020, due to increase in oil product exports (which climbed from 450kpdmm to 3.1mmbpd) Went). Therefore, Russia’s exports increased by 1 billion MOM to US$12.7 billion, but it is still down by 43 percent. The report states that the bulk of Russia’s crude oil is being exported to China and India, while its gasoline and diesel exports are being made to Africa and Latin America.
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