Deeper oil production cuts could fuel price volatility, says expert

Deeper oil production cuts could fuel price volatility, says expert

By Sajeev K Peter

KUWAIT: With OPEC+ countries extending their oil production cuts to the end of the year, the market could remain tight in terms of supplies and crude prices could continue trending higher under current conditions, said an oil market specialist on Tuesday. In an interview with Kuwait Times, George Khoury, global head of education and research at CFI, said demand levels, however, could remain a source of risks as economic conditions could deteriorate or remain below expectations in some parts of the world like in Europe or China.

Responding to questions related to oil production cuts from the OPEC+ to two-year low in July-August and the near-term and long-term outlooks for the oil market in view of the tightening supplies, he said some uncertainty remains around monetary policies in Europe and the US, which could have an impact on the global economy and demand for oil. “A rapid rise in oil prices could affect central banks’ efforts to fight inflation, creating incentives to keep interest rates at high levels for longer, in turn pressuring the demand side,” Khoury pointed out.

He said oil markets have already priced in the voluntary production cuts and have continued to integrate the impact of