Headache for OPEC as oil market structure signals return of glut – ZAWYA

Headache for OPEC as oil market structure signals return of glut – ZAWYA

Headache for OPEC as oil market structure signals return of glut The group will either have to consider further production cuts or tolerate lower oil prices for longer    A 3D printed oil pump jack is seen in front of displayed Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration Image used for illustrator purposeSINGAPORE/LONDON - Rising OPEC and U.S. oil supply, coupled with stalled economic and crude demand recovery, have pushed the futures market structure back to indicating a surplus, last observed during oil's collapse in April and May amid the coronavirus pandemic.The development is a headache for OPEC, which had been hoping demand would recover quicker after a round of record global output cuts. The group will either have to consider further production cuts or tolerate lower oil prices for longer.The surplus market structure, when prompt prices are weaker than future prices, is also a boon for traders, as they can store crude in the hope to resell it later at a profit. Royal Dutch/Shell, Total, Eni and Norway's Equinor have all reported bumper trading profits over the past week.The development is a headache for OPEC, which had been hoping demand would recover quicker after a