- Biden has landed in the Middle East and is expected to increase efforts to persuade Saudi Arabia and other OPEC members to increase oil production to curb high gasoline prices (BBG)
- The Saudi kingdom and the UAE are the only OPEC nations with significant unused output. According to official data, they have a combined buffer of almost 3 MMBbl/d
- Saudi oil industry executives have claimed in closed-door meetings that Saudi Aramco, the nation's state-owned corporation, can reach 12 MMBbl/d within 30 days and maintain that level for at least 90 days
- However, the company has not tested that production level for an extended period of time
- The demand for crude oil continues to outpace supply, with no sign that the economy is slowing enough to balance the market in the short term, according to Goldman Sachs
- “The physical market is still screaming that it’s very, very tight,” said Damien Courvalin, head of energy research at Goldman Sachs
- Even if US President Joe Biden persuades OPEC to increase supplies, he added, that would only be a "transient" fix that didn't address the issue of underinvestment in the global energy markets
- He also added that the recent selloff in crude futures, driven by recession fears, exacerbates underinvestment risks because the current price curve discourages much-needed production growth