00:00Is there really anyone out there who expects OPEC Plus to surprise the market once again with a decision to bring extra production back to market?
00:08Because, of course, there is still a 1.66 million barrel per day voluntary cut that was introduced a couple of years ago that could be up for discussion.
00:19Right. Well, I mean, I think that's a really good question. Who's expecting this increase?
00:24You know, Bloomberg, we had a survey of analysts and market watchers, and the vast majority think that the meeting that will be held on September 7th on Sunday will just be a rubber stamping and there won't be an increase.
00:38Now, there is a smaller group of analysts, a minority, who thinks that there could be a modest increase to production from the next month.
00:46Now, that's actually kind of interesting because in the past, the analysts haven't always been right.
00:50We were talking about the surprise hikes that have been happening since April, but they had signaled that those hikes had been finished after those 2.5 million barrels had been entered into the market.
01:01Now, the big question is, do they want to add these 1.66 million barrels starting to do that now?
01:07Because the plan was to do that by the end of 2026.
01:10So there's a lot of wiggle room. You're already in a really frothy market.
01:14So is this about, you know, adding barrels to the market because they think that there is still some tightness or is this about capturing market share?
01:22I think those will be somewhat the topics that will be discussed when they meet on Sunday.
01:26Yeah. And to what extent do you think some of the geopolitical considerations are also going to have to be factored in?
01:34We talk about, you know, the ongoing potential discussions between Russia and Ukraine.
01:41President Trump has sort of flouted the possibility of extra secondary sanctions on countries that buy Russian oil.
01:47He's done that with India, though it hasn't really had a noticeable impact on Russian production.
01:51To what extent do you think that could be a determinant of where we go in terms of, one, OPEC plus decision making and, two, the price of oil in the coming months?
02:02I mean, certainly geopolitics is swinging the price of oil quite a bit over the last few weeks, months, years even.
02:11I mean, Trump has and what he says has a large impact.
02:14And what happens between Russia, the war in Ukraine and the pressure the Trump administration puts on certain buyers, in particular India, does also have an impact on global oil flows and the price of oil, not just internationally, but also in the United States itself, something that Trump cares deeply about.
02:34Now, I think there's one thing we talk about geopolitics and relations between countries.
02:38I think one other thing that that perhaps OPEC plus will have to be looking at closely will be tariff and the impact of tariffs.
02:44Right. Where is the global economy, the health of the global economy, because that is something that's a bit easier to measure compared to what's Trump going to decide one day and wake up.
02:53You know, when you look at the measures and the tariffs on the table, OPEC plus will be looking and their analysts will be looking at economic growth or economic slowdown because of those tariffs.
03:03So I think that's one of the major factors that there will be in play here, because when you look at China, for example, Chinese demand hasn't been living up to where analysts thought they would be at this time of year.
03:15There's been a slump or not a slump, but there hasn't been the growth that was to be expected.
03:20At the same time, you look domestically in the United States, they're going to be seeing what U.S. policy is going to be doing to that market because the U.S.
03:27is a major consumer of oil. And some early indications are that demand might not really be there either because we've seen an oversized increase in inventories this week at the main Cushing facility.
03:38At the same time, you're also seeing run rates at refineries at the lowest level in a few months.
03:43So those together also indicate a bit of a weaker market.
03:47And those factors, you know, the geopolitics, but also just domestic politics of America will have an impact on what they decide.
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