Despite cuts in OPEC oil production and sanctions from Venezuela and Iran, the world appears to be oversupplied by crude oil, with the surplus peaking at 90 million barrels above the 2018 average level, according to Kayrros.
The company said global oil inventories rose by as much as 40 million barrels in May alone due to weaker refinery and final consumer demand as well as steady and strong growth in US light oil production. In addition, OPEC's total exports are not dropping as much as expected, as Iran continues to send oil overseas.
In fact, at the end of May, TankerTrackers reported the departure of Iran's first oil cargo after the end of US sanctions waivers, adding satellite images as evidence. Kayrros also cited satellite data as evidence that Iranian tankers carried crude oil abroad.
Data on the transponders that oil tankers use to convey their location also recently revealed that about 33 Large-Scale Iranian carriers are traveling with the AIS off completely. That's 12 detected in April, data from the shipbroker Gibsons, reported by Splash247, showed.
This rapid growth in global inventories, coupled with rapid US production, is likely to reinforce OPEC's determination to extend the production cuts originally planned for later this month. Although some OPEC members, such as small-scale Equatorial Guinea producer, say the cartel is comfortable with current price levels, chances are that not everyone is equally happy with Brent for $ 60.
The next OPEC + meeting when the course will be set for the next six months was initially scheduled for this month. It was, however, postponed at Moscow's request, which fueled further speculation about the immediate future of the fundamentals of oil. The meeting date may have finally been set: Reuters previously reported that it will take place July 1 and 2, citing unidentified sources.
By Irina Slav for Oilprice.com
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