Latest news with #DaanStruyven
Arabian Post
5 days ago
- Business
- Arabian Post
OPEC+ Eyes Pause in Production Rises After September Surge
OPEC+ plans to finalise a 2.2 million-barrel-per-day supply restoration by September and is deliberating halting further production increases from October onwards, delegates have indicated. Source participants say the cartel has scheduled a final monthly increment of approximately 550,000 bpd in September, completing the planned unwinding of cuts. Following that, discussions have begun around suspending additional increases—especially the roughly 1.66 million bpd tied to later phases of the rollback—potentially pausing as early as October. The move reflects a strategic pivot. Since April, OPEC+ has shifted from restrictive supply policies to a more assertive stance aimed at reclaiming global market share. The August hike of 548,000 bpd and a final 550,000‑bpd boost in September are designed to restore all previously idled capacity by month‑end, a process now ahead of the original timetable. Goldman Sachs estimates that these eight OPEC+ members—Saudi Arabia, Russia, UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria—will ramp up output by 1.67 million bpd between March and September, reaching around 33.2 million bpd, with Saudi Arabia contributing over 60%. ADVERTISEMENT Market reaction has been cautious. Headlines concerning the October pause briefly skewed crude futures, though prices largely returned to pre-announcement levels. Brent remains in the high‑$60s per barrel, with WTI trading near $66–$69.7. The internal calculus of OPEC+ appears guided by several considerations. The group has seized on peak northern‑hemisphere summer demand and is leveraging low Saudi production costs and substantial spare capacity to apply pressure on higher‑cost U. S. shale competitors. Yet analysts warn that the combination of revived OPEC+ output and growing non‑OPEC+ supply may risk oversupply by year‑end, potentially driving Brent below $60/barrel. Goldman Sachs, maintaining a $59/barrel forecast for Q4 2025 and $56 in 2026, cites resilient demand—particularly from China—as supportive. However, it highlights an elevated downside risk if OPEC+ pursues further rollbacks, notably in the 1.65 million bpd layer of cuts extending beyond 2026. Discussions on a production pause are reportedly at an early stage, with no definitive decision taken. A key videoconference is scheduled for 3 August, during which the group may formalise its approach to both the final 550,000 bpd increment and the decision on a pause. Analysts are watching closely. Some view the pause plan as a signal that OPEC+ is ready to pause once core supply restoration is achieved. Daan Struyven, co‑head of global commodities research at Goldman Sachs, commented that 'our base case remains that they will be done raising production once the 2.2 million barrel‑a‑day round of cuts is unwound'. The unfolding strategy presents a delicate balancing act for Saudi Arabia. The kingdom's influence allows it to drive accelerated production increases that challenge U. S. shale, while its capacity buffer provides strategic flexibility. However, maintaining this approach hinges on global demand dynamics and its ability to avoid triggering a price slump that undermines revenue balances. With the rapid restoration of output nearly complete, the group now faces a critical juncture. The pause in October would mark a shift from growth-driven supply strategies to a more cautious, equilibrium-focused posture—preserving market share without destabilising prices.
Yahoo
6 days ago
- Business
- Yahoo
Struyven: OPEC Production Cuts Always Seemed Temporary
Oil steadied as traders weighed a large increase in US crude stockpiles and a wave of new tariff rates from President Donald Trump. Meanwhile senior officials from three of OPEC's core producer nations, Saudi Arabia, UAE, and Kuwait have said that the global market needed the recent decision to further hike supply. Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs spoke to Bloomberg's Horizons Middle East and Africa anchor Joumanna Bercetche on the sidelines of the OPEC Seminar in Vienna.
Khaleej Times
7 days ago
- Business
- Khaleej Times
Market braces for sub-$60 oil as Opec+ lifts output
Global oil prices are poised to fall below $60 per barrel by year-end as Opec+ accelerates its unwinding of production cuts, catching markets off guard with an aggressive push to reclaim market share. In a surprise move over the weekend, the group announced a larger-than-expected hike of 548,000 barrels per day (bpd) for August, the fourth consecutive monthly increase in output, and signaled another 550,000 bpd rise in September. These supply additions will effectively complete the rollback of the 2.2 million bpd cuts initiated in 2023. Brent crude futures, which briefly spiked near $80 per barrel last month amid the Israel-Iran conflict, have since retreated sharply. As of Tuesday afternoon trading, Brent was hovering at $73.26 per barrel, down 5 per cent year to date, while West Texas Intermediate (WTI) was trading around $68.55, nearly 3 per cent lower since January. Goldman Sachs analysts, led by Daan Struyven, noted in a research note that Opec+ is deliberately prioritising long-term strategic goals over short-term price support. 'The group's decision to accelerate supply hikes indicates a continued shift towards normalizing spare capacity, reasserting influence over market dynamics, and restraining US shale activity,' the note said. Despite resilient demand in key markets like China, the bank maintains its bearish forecast for Brent to average $59 in Q4 2025 and dip to $56 in 2026. Adding to the pessimistic outlook, BNP Paribas slashed its year-end Brent forecast by $5 to $55 per barrel. However, the bank sees room for a recovery in 2026 as supply growth — both from Opec and non-Opec producers — is expected to moderate. Dennis Kissler, senior vice president at BOK Financial, pointed out the market's choppy movement: 'While supply is clearly climbing, demand is surprisingly firm. That tug-of-war is leading to erratic price action.' The ceasefire between Israel and Iran — announced late last month by US President Donald Trump — has further deflated the war risk premium that had temporarily lifted crude prices. With geopolitical concerns now receding and supply rising, analysts warn that the current surplus could deepen after the peak summer demand season ends. Behind the scenes, the political undertone of Opec+ decisions is gaining attention. Analysts say the alliance's swift rollback of supply curbs aligns with President Trump's vocal calls for lower energy prices. 'Opec+ appears to be accommodating Trump's re-election agenda by easing pressure on pump prices,' said Amrita Sen, chief oil analyst at Energy Aspects. The alliance's production strategy involves major producers — Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Kazakhstan, Algeria, and Oman — ramping up output in stages. After a modest 138,000 bpd increase in April, the group added 411,000 bpd in each of May, June, and July, before announcing the outsized August hike. The September boost will not only complete the rollback of 2.2 million bpd cuts but also allow UAE to fully realize its 300,000 bpd quota hike previously negotiated. Analysts noted that even with an additional 3.6 million bpd in voluntary cuts remaining until 2026, Opec+'s aggressive moves have alarmed US shale producers. According to the Dallas Fed Energy Survey, 88 per cent of US exploration and production firms expect a decline in oil output over the next year if WTI remains at or below $60 per barrel. The strain is already evident: Shell and ExxonMobil have warned of weaker second-quarter earnings due to soft oil and gas prices, with Exxon forecasting a $1.5 billion hit to its bottom line. Morgan Stanley had earlier projected that global oil majors would face a slump in profits through 2026 due to oversupply. That warning now appears prescient. 'With crude markets likely to be flooded well into 2025, the prospect of sustained price weakness is real,' said Jorge Leon, senior VP at Rystad Energy. Still, there are pockets of contrarian optimism. Some analysts believe strong Asian demand and tighter inventories in Q4 could provide a soft floor around the $60 mark. But for now, the sentiment remains tilted toward a bearish cycle — especially as Opec+ doubles down on volume over value. Market insiders said unless demand unexpectedly surges or geopolitical tensions reignite, oil prices look set to slide deeper into bear territory as 2025 progresses.
Economic Times
07-07-2025
- Business
- Economic Times
Oil prices may plunge below $60 as OPEC+ ramps up production — here's what Goldman Sachs and BNP Paribas are predicting for the global energy market
Synopsis Oil prices are expected to fall below $60 per barrel as OPEC+ ramps up production, shaking up the global energy market. With a fresh output boost of 548,000 barrels per day announced for August, this marks the fourth straight month of supply increases. Analysts from Goldman Sachs and BNP Paribas predict Brent crude may drop to $55–$59 by late 2025. Despite strong demand from China, supply is outpacing growth, putting pressure on prices. Recent geopolitical easing, including a ceasefire between Israel and Iran, also removed oil's war-risk premium. Could this mark a turning point in oil market trends? Oil prices are sliding below $60 as OPEC+ boosts output again. With analysts forecasting further drops, rising supply and geopolitical calm are shifting the market. Read why crude oil prices may stay low through 2025 despite strong global demand. Oil prices expected to drop below $60 as OPEC+ boosts output and market shifts- Oil prices are under growing pressure as OPEC+ continues to increase production, with Wall Street analysts now predicting crude futures could fall below $60 per barrel by the end of the year. After several months of steady hikes in supply, OPEC+ announced over the weekend that it would add another 548,000 barrels per day to global output in August. This marks the fourth consecutive monthly increase and signals a significant shift in the group's production strategy—one that could shake up the global energy market in the months ahead. Brent crude recently dropped below $68 , while WTI (U.S. benchmark) dipped to around $65–66 , before a minor rebound. recently dropped below , while dipped to around , before a minor rebound. Analysts believe oil prices could slip below $60 per barrel if the supply surge continues. The main reason oil prices are expected to decline is the steady rise in supply by the OPEC+ alliance. This group, which includes the Organization of the Petroleum Exporting Countries and its allies like Russia, is steadily reversing the deep production cuts made during the pandemic. The August increase of 548,000 barrels per day was larger than expected and follows similar monthly hikes this year. Goldman Sachs analysts, led by Daan Struyven, noted that the production ramp-up shows OPEC+ is trying to regain lost market share while also managing internal cohesion. According to Struyven, this move also puts pressure on U.S. shale producers, who face tighter margins with falling prices. Despite resilient demand—especially from China, the world's largest oil importer—the increasing supply is expected to outweigh consumption growth by late 2025. The average U.S. gas price has dropped to $3.16 per gallon , down 11% year-over-year . , down . Consumers may benefit at the pump, but the long-term impact on U.S. shale producers could be negative. Goldman Sachs projects Brent crude will average $59 in the fourth quarter of 2025 and dip further to $56 by 2026. Meanwhile, BNP Paribas revised its year-end Brent forecast down by $5 to $55 per barrel. However, BNP expects prices to recover in 2026 as supply growth slows down both within OPEC and among non-OPEC producers. As of Monday, West Texas Intermediate (WTI) crude was trading around $67 per barrel, while Brent crude, the global benchmark, was slightly higher at $69 per barrel. Both contracts showed minor gains—less than 1%—but the broader trend still points to a slow and steady decline. Oil prices briefly surged to nearly $80 per barrel last month during the conflict between Israel and Iran. At the time, some analysts warned of worst-case scenarios where crude could hit $120 to $130 per barrel if the situation escalated. However, those fears eased quickly after President Trump announced a ceasefire late last month, removing much of the war-related risk premium. Since then, oil prices have cooled significantly. Year-to-date, WTI is down about 3%, while Brent has dropped roughly 5%, reflecting easing geopolitical risk and stronger supply outlook. Despite the bearish price forecasts, demand remains firm, particularly from key markets like China. Dennis Kissler, senior vice president at BOK Financial, noted that 'the supply picture definitely looks to be elevating; however, the stronger demand is remaining above expectations as well, hence the choppy trade.' This tug-of-war between rising supply and steady demand is creating a volatile environment. While long-term price forecasts lean lower, near-term movements may continue to fluctuate based on regional demand, inventory levels, and short-term geopolitical developments. Analysts do see a silver lining down the road. BNP Paribas believes the oil market could bounce back in 2026, mainly because both OPEC and non-OPEC nations are likely to slow production growth. This slowdown, combined with a possible uptick in demand, could bring balance back to the market and support higher prices. However, that recovery depends on several moving parts—from global economic health to energy policy shifts and investment in renewables. For now, the forecast remains bearish, with Brent likely staying below $60 for the next several quarters. All eyes will be on the next OPEC+ meeting and September's production update. If the group sticks to its current path and continues boosting supply, oil could slide further below $60. But if demand surprises to the upside or supply growth slows unexpectedly, prices could stabilize sooner than expected. For now, traders and consumers alike should prepare for a market that's shifting fast—fueled by policy, politics, and production decisions that could reshape the energy landscape over the next year. Q1: Why are oil prices falling below $60 now? Because OPEC+ is increasing oil supply while demand is steady, pushing prices down. Q2: What is the future forecast for Brent crude oil? Analysts expect Brent crude to average around $59 in late 2025 and $56 in 2026.
Time of India
07-07-2025
- Business
- Time of India
Oil prices may plunge below $60 as OPEC+ ramps up production — here's what Goldman Sachs and BNP Paribas are predicting for the global energy market
Oil prices are expected to fall below $60 per barrel as OPEC+ ramps up production, shaking up the global energy market. With a fresh output boost of 548,000 barrels per day announced for August, this marks the fourth straight month of supply increases. Analysts from Goldman Sachs and BNP Paribas predict Brent crude may drop to $55–$59 by late 2025. Despite strong demand from China, supply is outpacing growth, putting pressure on prices. Recent geopolitical easing, including a ceasefire between Israel and Iran, also removed oil's war-risk premium. Could this mark a turning point in oil market trends? Oil prices are sliding below $60 as OPEC+ boosts output again. With analysts forecasting further drops, rising supply and geopolitical calm are shifting the market. Read why crude oil prices may stay low through 2025 despite strong global demand. Tired of too many ads? Remove Ads Oil prices under pressure: Is $60 the next stop? Brent crude recently dropped below $68 , while WTI (U.S. benchmark) dipped to around $65–66 , before a minor rebound. recently dropped below , while dipped to around , before a minor rebound. Analysts believe oil prices could slip below $60 per barrel if the supply surge continues. Why are oil prices expected to fall below $60? U.S. gas prices drop as global supply surges The average U.S. gas price has dropped to $3.16 per gallon , down 11% year-over-year . , down . Consumers may benefit at the pump, but the long-term impact on U.S. shale producers could be negative. What are analysts forecasting for Brent and WTI crude? Tired of too many ads? Remove Ads How did geopolitical tensions influence recent oil prices? Is demand still strong enough to support prices? Could oil prices rebound in 2026? What should oil watchers look out for next? Tired of too many ads? Remove Ads FAQs: Oil prices are under growing pressure as OPEC+ continues to increase production, with Wall Street analysts now predicting crude futures could fall below $60 per barrel by the end of the year. After several months of steady hikes in supply, OPEC+ announced over the weekend that it would add another 548,000 barrels per day to global output in August. This marks the fourth consecutive monthly increase and signals a significant shift in the group's production strategy—one that could shake up the global energy market in the months main reason oil prices are expected to decline is the steady rise in supply by the OPEC+ alliance. This group, which includes the Organization of the Petroleum Exporting Countries and its allies like Russia, is steadily reversing the deep production cuts made during the pandemic. The August increase of 548,000 barrels per day was larger than expected and follows similar monthly hikes this Sachs analysts, led by Daan Struyven, noted that the production ramp-up shows OPEC+ is trying to regain lost market share while also managing internal cohesion. According to Struyven, this move also puts pressure on U.S. shale producers, who face tighter margins with falling prices. Despite resilient demand—especially from China, the world's largest oil importer—the increasing supply is expected to outweigh consumption growth by late Sachs projects Brent crude will average $59 in the fourth quarter of 2025 and dip further to $56 by 2026. Meanwhile, BNP Paribas revised its year-end Brent forecast down by $5 to $55 per barrel. However, BNP expects prices to recover in 2026 as supply growth slows down both within OPEC and among non-OPEC of Monday, West Texas Intermediate (WTI) crude was trading around $67 per barrel, while Brent crude, the global benchmark, was slightly higher at $69 per barrel. Both contracts showed minor gains—less than 1%—but the broader trend still points to a slow and steady prices briefly surged to nearly $80 per barrel last month during the conflict between Israel and Iran. At the time, some analysts warned of worst-case scenarios where crude could hit $120 to $130 per barrel if the situation escalated. However, those fears eased quickly after President Trump announced a ceasefire late last month, removing much of the war-related risk then, oil prices have cooled significantly. Year-to-date, WTI is down about 3%, while Brent has dropped roughly 5%, reflecting easing geopolitical risk and stronger supply the bearish price forecasts, demand remains firm, particularly from key markets like China. Dennis Kissler, senior vice president at BOK Financial, noted that 'the supply picture definitely looks to be elevating; however, the stronger demand is remaining above expectations as well, hence the choppy trade.'This tug-of-war between rising supply and steady demand is creating a volatile environment. While long-term price forecasts lean lower, near-term movements may continue to fluctuate based on regional demand, inventory levels, and short-term geopolitical do see a silver lining down the road. BNP Paribas believes the oil market could bounce back in 2026, mainly because both OPEC and non-OPEC nations are likely to slow production growth. This slowdown, combined with a possible uptick in demand, could bring balance back to the market and support higher that recovery depends on several moving parts—from global economic health to energy policy shifts and investment in renewables. For now, the forecast remains bearish, with Brent likely staying below $60 for the next several eyes will be on the next OPEC+ meeting and September's production update. If the group sticks to its current path and continues boosting supply, oil could slide further below $60. But if demand surprises to the upside or supply growth slows unexpectedly, prices could stabilize sooner than now, traders and consumers alike should prepare for a market that's shifting fast—fueled by policy, politics, and production decisions that could reshape the energy landscape over the next OPEC+ is increasing oil supply while demand is steady, pushing prices expect Brent crude to average around $59 in late 2025 and $56 in 2026.
