OPEC+ Focusing on Inventories Over Price Targets: Oil Analyst Sen

Crude oil heading towards a deep weekly decline as more investors bet Saudi Arabia will increase output. The Financial Times reporting this week, Saudi Arabia is ready to abandon its unofficial price target of $100 a barrel for crude as it prepares to increase output in a sign that the kingdom is resigned to a period of lower oil prices. Joining us now, Amrita Sen of Energy Aspects. Amrita, we all remember November 2014 is a repeat brewing. I think you know this better than I do. I think some of those words used in the headline were a bit misleading. I don't think anybody in particularly Saudi Arabia have ever said anything about a $100 target. And I do think the concept of market share or the way it was written is taken out of context. Look, what Prince Abdulaziz and the countries who have come out with the voluntary cuts have said very clearly is that A, they're voluntary, so they are going to be unwound and they are hoping that the compensation cuts that are supposed to be coming through will be able to at least partially offset the increase in production. So, this isn't about flooding the market and we put out a note yesterday saying that the focus of OPEC plus continues to remain on inventories to make sure that the inventories remain below the five-year average. And how they manage that between them in terms of who's cutting and who's bringing back production is almost irrelevant at least from their point of view because the focus will still be for the group, let's make sure inventories don't build, let's make sure the curve is in backward And I think that's the thing somehow the market has forgotten. Of course, the weakness in demand has made it challenging for them. There's no doubt about that. And I'm not saying that next year's miraculously demand is going to be much higher. Having said that, some green shoots, some of the stimulus that China is doing now and the Fed rate cuts will help. But I also think we need to put it into context. I think yesterday's article, of course, everybody's talking about it. I don't think there's a lot of truth to that headline that was talked about. The increase in production, yes, it's planned from December. We have that in our numbers as well. And they've communicated that. So it's not a shift in strategy.