OPEC+ sees bigger 2022 surplus, risks to oil demand growth

OPEC+ sees bigger 2022 surplus, risks to oil demand growth

LONDON/MOSCOW - The oil market will likely see a bigger-than-expected surplus this year, OPEC+ said in a report on Wednesday, as rising energy costs and tighter monetary policy exert downward pressure on oil demand.

The report comes days ahead of an OPEC+ policy meeting on Sept. 5 and over a week after OPEC leader Saudi Arabia said the group may cut oil output.

The Joint Technical Committee (JTC), which meets on Wednesday, advises the Organization of the Petroleum Exporting Countries and allies led by Russia, collectively known as the OPEC+ group of oil-producing nations, on market fundamentals.

OPEC+ is ready to cut output amid volatility in the oil futures market, driven by thin liquidity and a disconnect with physical markets, Saudi Energy Minister Prince Abdulaziz bin Salman said last week.

Five sources told Reuters that discussions are yet to begin on production policy beyond September and whether the producer group would cut output.

Oil prices have been extremely volatile in recent weeks. While Prince Abdulaziz' comments helped propel prices to one-month high above $105 a barrel on Monday, Brent crude on Wednesday traded $10 a barrel below those levels, on expectations for lower demand.

At its last meeting, OPEC+ agreed to raise production targets by 100,000