The oil market could be under pressure for a long time as Brazil\'s oil production surges again amid an ongoing glut of crude

[ Time:2019-11-25 | Hits:196 ]

International oil prices remained volatile on Tuesday, hitting a two-week low on news that Russia was reluctant to cut production further.Weak demand and excess supply are at the root of the current decline in oil prices, but even so, global supply is likely to rise further.According to RystadEnergy's latest data and projections, Brazil's oil production could rise from an average of 2.8 million barrels per day in 2019 to more than 5.5 million barrels per day by 2030, with Petrobras poised to become the world's largest listed oil company.
In November, the biggest oil auction in Brazil's history was a disappointment, with little interest from international exploration and production companies.But that has not stopped petrobras from expanding.Petrobras, which has almost complete control of more than 8 billion barrels of oil in Brazil's oilfields, plans to build a sixth floating drilling vessel there.To develop these coastal resources, Brazil plans to spend a massive $70 billion in overseas capital investment between 2020 and 2025, all of it on oil fields.The project will have a huge impact on petrobras.
'in a few years, petrobras can become the world's largest publicly traded oil company,' said AdityaRavi, vice President of Rystad energy's upstream team. 'we expect petrobras alone to increase production by more than 1.3 million barrels a day over the next 10 years.'
During 2019, petrobras went from fifth to third place, producing 2.2 million barrels a day in the third quarter.
According to RystadEnergy's latest projections, Petrobras could become the second-largest oil producer in the next few months and could overtake Rosneft, the world's largest oil producer, in the next decade.Brazil's oil production could rise above 5.5m b/d from an average of 2.8m b/d in 2019, as petrobras's potential peak production by 2030 is close to 3.8m b/d.
Brazilian officials recently said their country wanted to join OPEC.Brazil's current output would make it Opec's third-largest producer after Saudi Arabia and Iraq.Ravi warned that joining Opec could cause major disruption to Brazil, putting it in the spotlight and possibly tying the knot as production rises.
But Brazil's economy minister, eduardo guedes, said his country was open to discussions with OPEC about the future of the energy industry, but was not interested in joining a cartel that sets prices and limits production.Geddes says using oil shocks to crush the west...No way!He also said President bossonaro has his principles and values and will not change for the sake of money.He said Brazil wanted to increase global oil production, not cut it, as Opec often does.
The expansion of petrobras and the attitude of Brazil's economy minister suggest that global oil supplies are ample and production is likely to keep rising for a long time to come, but prices could face long-term pressure due to weak demand.In addition, the market is expecting this week's U.S. crude oil inventory data to beat expectations, with the average forecast of the six analysts surveyed saying crude stocks rose by about 1.1 million barrels in the week ended Nov. 15, the fourth straight week of gains.