Despite the fall in oil prices, OPEC and its allies policy decisions can have a major impact on oil prices.
In May 2023, the total number of rigs drilling for oil and gas was already down by around 7% when compared with its peak in December 2022.
Slower drilling activity eventually translates into slower production growth, creating a delay of up to 6 months.
In the meantime, high levels of production are keeping inventories elevated, especially in the case of gas, which is keeping prices under pressure.
OPEC and its allies are weighing the possibility of further oil supply cuts, despite the fall in oil prices.
OPEC+ and its allies led by Russia, pumps around 40% of the world’s crude.
So, its policy decisions can have a major impact on oil prices.
Bloomberg’s Senior Oil and Gas Analyst Fernando Valle joins us to discuss.
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