Despite the cuts which have been made recently by OPEC+, the market of oil is still looking at a surplus in the year 2020 as per the report of the International Energy Agency.
There was an additional cut of 500,000 bpd which had been announced by the OPEC+ and although it does sound impressive, the group had already been producing well below their limits. In the month of November, OPEC had produced 440,000 below the ceiling which was agreed upon.
Saudi Arabia has made an agreement of shouldering an additional 400,000 bpd of cuts that are voluntary. However, the deal has also exempted 1.5 million bpd of the condensate production of Russia which has allowed Russia to actually make an increase in the condensate output by 0.8 million barrels per day.
OPEC has said in their report that the oil market is going to be largely balanced for the year 2020 albeit a temporary glut is going to be there in the early part of 2020. The IEA has seen the inventories increasing at a rate in the first quarter which is 0.7 million barrels per day.
The IEA has cut their forecast for the supply growth that is non-OPEC to 2.1 mb/d from 2.3 mb/d due to the growth being weaker from Ghana, US and Brazil. The United States usually receives all the attention however the news from Ghana and Brazil had led to the IEA revising their forecasts.
Tullow Oil had notably revealed that there was a major disappointment from the operations from Ghana which had caused a share price meltdown in the week. The stocks had fallen by close to 70% in one day as the investors had made an overhaul of their valuation for this company.
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