Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

APPEC-Oil stocks to rise on slower demand, OPEC cuts needed to bolster prices

Commodities Sep 26, 2022 07:02AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

(Corrects to 0.5-1 million bpd from 1-1.5 million bpd in paragraph 4)

By Emily Chow and Isabel Kua

SINGAPORE (Reuters) -Global oil stocks are set to rise next year amid weakening demand and a stronger U.S. dollar, executives at an oil conference said on Monday, adding that OPEC will have to cut output to reduce supply if they want prices to remain supported.

Oil prices climbed past $100 a barrel after Russia, the world's largest exporter of crude and fuels, invaded Ukraine in February. But prices have come off their peaks by nearly 40% amid fears that an economic slowdown would weaken demand.

Brent crude and U.S. West Texas Intermediate (WTI) prices slid to eight-month lows on Monday, last trading around $85 and $78, respectively, weighed by a stronger U.S. dollar and concerns that rising interest rates will tip major economies into recession and cut demand for oil. [O/R]

OPEC would need to make oil cuts of 0.5-1 million barrels per day to keep Brent prices above $90, said Gary Ross, chief executive of Black Gold Investors LLC, who also expects oil inventories to continue building in the first quarter despite Russia's declining oil output.

"We could be in contango in the first quarter if OPEC doesn't cut, so if they want to see prices at $90 on their balance, they're going to have to cut," Ross said.

Others agreed that stockbuilds will cap prices though fears will rise when European sanctions go into effect on Dec. 5.

A European Union embargo on Russian crude and oil products over the next few months could also tighten supplies and drive prices higher, although G7 nations are hoping to minimise supply disruption by implementing a price cap mechanism.

"I think inventories will rise next year as demand slows down and more production comes in ... but it all depends on whether Russian oil flows or not. That's the elephant in the room," Fereidun Fesharaki, founder and chairman of energy consultancy FGE, told Reuters on the sidelines of the conference, as bans on Russian oil loom.

A successful revival of the Iran nuclear deal will also lead to an inventory build-up "in a big way," he added, which will lead to production cuts by OPEC+, or the Organization of the Petroleum Exporting Countries and its allies.

"Oil's near-term price outlook all (has) to do with sentiment, signals from China and fear about the future. But when we get to Dec. 5, if Russian oil gets shut in, prices will be $120 or more."


Refiners in China, the world's largest crude importer, however, expect Beijing to release up to 15 million tonnes worth of oil product export quotas for the rest of the year to support sagging exports. Such a move would add to global supplies and depress fuel prices but could support China's crude demand.

At least three Chinese state oil refineries and a privately run mega refiner are considering increasing runs by up to 10% in October from September, eyeing stronger demand and a possible surge in fourth-quarter fuel exports.

"There's been a push by the refiners, the state-owned companies to export more products ... in an effort I think to try and increase exports and help support the yuan and trade balance," said Black Gold Investors' Ross.

He added, however, that it would be difficult for Chinese refiners to achieve 15 million tonnes of exports by the year-end "because it's right around the corner".

"I think that they'll export quite a bit less than that, and it's unclear at this stage, but it doesn't look like the quotas will be carried over the next year."

APPEC-Oil stocks to rise on slower demand, OPEC cuts needed to bolster prices

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email