Despite the recent voluntary production cut by top OPEC+ producers Russia and Saudi Arabia and major crude consumer China facing economic headwinds, crude prices will remain strong and resilient, Saudi Aramco’s, Amin Nasser, forecasts.
Not only Chinese oil demand will continue to grow considering the fact that there is still a lot of mileage for the economy and China to pick up, but the aviation sector is also indicating room for growth since it was at 85% compared to pre-pandemic levels.
Nasser added that Saudi Arabia still has adequate supply to satisfy its customers despite last week’s decision to extend for another month to include September the voluntary oil output cut of 1 million BPD, hence tightening global markets further.
After Saudi Arabia and the world’s second-largest economy and allied OPEC producer Russia pledged to keep supplies down a bit longer, oil prices have soared to four-month highs.
After previously pledging to curb production by nearly 5% of its output – or some 500,000 bpd – from March until the end of this year, Russia has also announced plans to reduce exports by 300,000 bpd, starting from September.