Master Stroke: Price Of Crude Oil Likely To Go Up As Saudi Arab Plans To Reduce Its Supply |ABP News
Oil: OPEC warns swelling inventories could cause oversupply
Less than two weeks before US sanctions against Iran kick in, OPEC said the oil market could shift toward a surplus and signaled it would adjust output accordingly if that were the case.
Saudi OPEC governor Adeeb Al-Aama on Thursday the market in the fourth quarter could be approaching "an oversupply situation." Riyadh is the largest oil exporter in the world and has told the Trump administration it could step up production after sanctions against Iran take effect November 4.
"We think that demand will start dropping off as we approach year-end in accordance with regular seasonal patterns," he said at a meeting in Vienna, according to Reuters. "We have the flexibility to adjust our production to mirror it."
While OPEC said in a statement out Thursday that it was satisfied with developments in the oil market, it also cited a potential buildup of supply. Countries bound by supply constraints reached a conformity level of 111% in September 2019, according to the cartel. Meanwhile, US crude stockpiles have risen for five weeks in a row.
"The committee however expressed concerns about rising inventories in recent weeks and also noted looming macro economic uncertainties which may require changing course," the statement said.
But against a backdrop of falling output in key OPEC countries, including Venezuela and Angola, forecasters warn sanctions could squeeze the market.
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