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It was an alliance "OPEC+" Yesterday, Wednesday, it approved a slight increase in production by 100,000 barrels, as of the first of next September, despite the demands of consumers, especially United State A greater increase in production in order to lower prices.
Al-Ghais, who officially assumed his duties on the first of August, said: "The oil market is now living in a state of tension between global economic concerns, which include inflation, and fears of entering into an economic recession, on the one hand, and on the other hand, fears of a scarcity or decrease in the spare production capacity, due to Decreased investments in the production, drilling and exploration sector Over the past years,".
He Said "In the current stage, we need to constantly review data related to the market situation, supplies, and the balance of supply and demand, and therefore the (OPEC +) option was to launch a small increase in production".
He added: "The question was, do we fully exhaust the limited spare production capacity, or do we maintain its existence for precautions and emergencies if the world needs it?".
Al-Ghais said that the alliance "OPEC+" He will continue his periodic meetings on a monthly basis, so that he can keep pace with the rapid changes in the markets, "We will remain in a state of anticipation, monitoring and constant readiness to intervene as necessary to balance supply and demand, if the need arises, through this mechanism that we have been implementing since 2017.".
slowing economy
be seen Secretary General of the Organization of Petroleum Exporting Countries "OPEC"، Haitham Al GhaisTalking about the world entering into an economic recession, "Exaggerated"and that "Slowing economic growth may be the correct expression".
He added: "Stage slack We have not reached it yet, and God willing, we will not. The world is still coming out of the negative economic effects resulting from the Corona epidemic, and therefore the world is still in a state of economic growth, but the pace of growth is being reviewed and reduced.".
Al-Ghais indicated that in the event of a slowdown in the Economic growth This will negatively affect the demand for oil. "But what is distinctive about the (OPEC +) agreement is the flexibility of the agreement, and the mechanism used in periodic and monthly meetings, or even exceptional meetings if necessary in order to intervene to balance supply and demand, similar to the historical agreement to reduce production in April 2020 to face the repercussions corona".
Al-Ghais said that "OPEC" It expects the demand for oil to increase this year by about 3 million barrels per day so far, and that these numbers will be reviewed and the release of the updated data on August 11, with the monthly report, and it is expected that the quantities will decrease slightly from previous expectations last month, and this is a normal thing between various bulletins, And do not forget that we will soon enter the fourth quarter of the year, when it will witness a seasonal decrease in demand compared to summer. Refineries around the world will also enter the periodic maintenance schedule, and this will also cause a decrease in demand."
Risks of underinvestment
The Secretary-General of . warned"OPEC" of the risks of declining global investments in the oil sector, stressing that "OPEC" It has long been calling for more investment in drilling, exploration and production, in order to ensure that spare capacity is available in case it is needed.
"What we are witnessing today of high oil prices, may be mainly due to the lack and scarcity of investments in the oil industry during the past years, which has led to countries, whether in OPEC + or other countries such as America, Canada and the North Sea countries, that they do not have the ability to increase production".
Al-Ghais said that in the years prior to Corona, there were annual investments in the range of 600 to 700 billion dollars in the field of drilling, exploration and production, but after Corona, these investments decreased to less than 300 billion dollars, adding that so far the investments have not returned to levels before Corona.
He added that "According to OPEC forecasts until 2045, the oil industry as a whole needs investments estimated at more than 12 trillion dollars to maintain the world’s supply of the required energy from oil, not to mention gas and other energy sources.".
2023 forecast
Al-Ghais said that it is difficult to release expectations for the oil market in 2023, especially since there are many economic variables that affect the market, such as inflation and the way to treat it, and also, the situation of the Corona epidemic, "In fact, we are still not out of the bottleneck of the Corona crisis and its effects. In the first and second quarters of this year, we saw a wave of closures in China, which has a significant impact as it is the second largest consumer of oil in the world.".
"It is difficult to predict the future of the market next year, but I am optimistic. The situation is now much better than it was in the past two years, and we in the OPEC + alliance, which includes 23 countries, continue to be vigilant and monitor market conditions, and we will play our role constantly until the market is in a state of recovery.".
He added: "It is important to stress the need for more investments in the oil industry not only for 2023, but also for the coming years.".
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It was an allianceOPEC+Yesterday, Wednesday, it approved a slight increase in production by 100,000 barrels, as of the first of next September, despite the demands of consumers, especially United State A greater increase in production in order to lower prices.
Al-Ghais, who officially assumed his duties on the first of August, said, “The oil market is now living in a state of tension and attraction between global economic concerns, which include inflation, and fears of entering into an economic recession, on the one hand, and on the other hand, fears of scarcity or low production capacity. backup, because Decreased investments in the production, drilling and exploration sector For all the past years.”
He said, “In light of the current stage, we need to continuously review data related to the market situation, supplies, and the balance of supply and demand, and therefore the (OPEC +) option was to launch a small increase in production.”
He added, “The question was, do we fully exhaust the limited spare production capacity, or do we maintain its existence for precautions and emergencies if the world needs it?”
Al-Ghais said that the “OPEC +” alliance will continue its periodic meetings on a monthly basis, so that it can keep pace with the rapid changes in the markets, “and we will remain in a state of anticipation, monitoring and constant readiness to intervene as necessary to balance supply and demand if the need arises through this mechanism that we are continuing in It has been applied since 2017.
slowing economy
be seen Secretary General of the Organization of Petroleum Exporting Countries “OPEC”، Haitham Al GhaisTalking about the world entering into an economic recession is “exaggerated,” and that “slowing economic growth may be the correct expression.”
He added: “Stage slack We have not reached it yet, and God willing, we will not reach it, as the world is still emerging from the negative economic effects resulting from the Corona epidemic, and therefore the world is still in a state of economic growth, but the pace of growth is reviewed and reduced.
Al-Ghais indicated that in the event of a slowdown in the Economic growth This will negatively affect the demand for oil, “but the distinctive thing about the (OPEC +) agreement is the flexibility of the agreement, the mechanism used in periodic and monthly meetings, or even exceptional meetings if necessary in order to intervene to balance supply and demand, similar to the historical agreement. To reduce production in April 2020 to face the repercussions corona“.
Al-Ghais said that “OPEC“You expect an increase in oil demand this year by about 3 million barrels per day so far, and that these numbers will be reviewed and the release of the updated data on August 11, with the monthly report, and it is expected that the quantities will decrease slightly from previous expectations last month, and this is normal between various bulletins.” And do not forget that we will soon enter the fourth quarter of the year, when it will witness a seasonal decrease in demand compared to summer, and refineries around the world will also enter the periodic maintenance schedule, and this also causes a decrease in demand.”
Risks of underinvestment
The Secretary-General of “OPEC” warned of the dangers of a decline in global investments in the oil sector, stressing that “OPEC” has long been calling for more investments in the fields of drilling, exploration and production, in order to ensure the availability of spare spare capacity in case of need.
“What we are witnessing today of high oil prices, may be mainly due to the lack and scarcity of investments in the oil industry during the past years, which has led to countries, whether in OPEC + or other countries such as America, Canada and the North Sea countries, that they do not have the ability to to increase production.
Al-Ghais said that in the years prior to Corona, there were annual investments in the range of 600 to 700 billion dollars in the field of drilling, exploration and production, but after Corona, these investments decreased to less than 300 billion dollars, adding that so far the investments have not returned to levels before Corona.
He added, “According to OPEC’s forecasts until 2045, the oil industry as a whole needs investments estimated at more than 12 trillion dollars to maintain the world’s supply of the required energy from oil, not to mention gas and other energy sources.”
2023 forecast
Al-Ghais said that it is difficult to release forecasts for the oil market in 2023, especially since there are many economic variables that affect the market, such as inflation and the way to deal with it, and also, the situation of the Corona epidemic, “We are, in fact, still not out of the bottleneck of the Corona crisis and its effects, we have seen In the first and second quarters of this year, a wave of shutdowns occurred in China, which has a significant impact as it is the second largest oil consumer in the world.
“It is difficult to predict the future of the market next year, but I am optimistic. The situation is now much better than it was in the past two years, and we in the OPEC + alliance, which includes 23 countries, continue to be vigilant and monitor market conditions, and we will play our role constantly until the market is in a state of recovery.” .
He added, “It is important to stress the need to pump more investments into the oil industry, not only for 2023, but also for the coming years.”