"OPEC+ registered compliance of 89% during July 2020, translating into an 8.6 million bpd cut (out of the 9.7 million bpd target).
Although laggards are set to deepen cuts for August 2020 and September 2020 to “made up” for falling short their past target, we find unlikely that they will be able to achieve 100% of compliance.
In the case of Iraq, we believe that the target set to compensate the alliance is overambitious given Iraq’s dire economic need for oil revenues right now.
Getting the country’s production below 4 million bpd will be an uphill battle.
In that sense, we find that expected deeper cuts from laggards will have a limited impact on the total cuts.
We see the increase in OPEC+ production boosting crude exports from August onwards as the alliance gradually reopens the oil taps. UAE’s ADNOC has already announced plans to raise its crude exports by as much as 300 000 bpd next month.
Despite the rise in exports, we expect prices to remain static as an increase in crude processed by refineries is likely to offset higher supply volumes.
We find that prices will have to stay where they are for the rest of 2020 as any uptick will hurt already struggling refining margins and negatively impact the most-needed recovery in refinery runs."
Read the article online at: https://www.oilfieldtechnology.com/special-reports/16072020/rystad-energy-comments-on-opec-meeting/