Today, OPEC + makes a decision to increase oil production

Futures contracts for WTI oil remains above $ 88 a barrel on Wednesday. The relatively high prices seem to be affected by geopolitical tensions and limited global gas supplies. Today OPEC + will announce its decision to increase production.

From the beginning of this year. the price of the WTI barrel increased by over 17 percent. and is the highest in seven years. It also seems that in the era of lifting pandemic restrictions, the demand for the raw material is growing.

Baseline scenario: production increase by 400 barrels a day

Meanwhile, the group of major oil producers is expected to stick to the current policy of moderate production growth, citing the fact that the world is facing a shortage of energy due to a poorly calculated transition to greener fuels by consumer countries.

It is expected, that OPEC + will agree to a PLN 400 increase planned for March barrels per day (bpd), although production targets were once again missed in January and thus less crude oil entered the market than previously assumed.

Goldman Sachs stated in a memo that there is, however, a chance for OPEC + countries to grow faster, given the rate of recent rapid price increases.

According to forecasts, oil prices will fall, stocks will increase

Według the American EIA agency already from the second quarter of 2022, the global crude oil market is expected to experience a situation in which supply will exceed demand, which may result in price stabilization or even a drop in prices in the long term. According to the EIA and the Short-Term Energy Outlook report, the average price of a WTI barrel in 2022 may reach USD 71,32, and in 2023 it may drop to USD 63,50.

According to EIA forecasts, global oil stocks may grow at a rate of 0,5mbpd in 2022 and 0,6mbpd in 2023. The agency expects that global consumption of liquid fuels will increase by 3,6mbpd in 2022 and 1,8mbpd in 2023 million bpd in 2,5, and the average oil production in OPEC may increase by 28,8 million bpd to an average of 2022 million bpd in 28,9 and an average of 2023 million bpd in XNUMX.