Carlyle: Markets grossly overestimate oil glut | Wilnesh News

SINGAPORE – Jeff Currie, chief strategy officer for energy pathways at private equity giant Carlyle Group, said global markets have grossly exaggerated the oil supply glut.

Currie told the annual Asia-Pacific Oil Conference in Singapore that concerns about oversupply in the market are “totally overblown,” which he attributed to excessive pessimism about Chinese demand at a time when U.S. crude output is flat.

U.S. crude prices last week hit their lowest since June 2023 as global demand rises largest crude oil importing country Remaining tepid in a market that is clearly oversupplied.

“The base effect and destocking have greatly exacerbated the weakness in (Chinese) demand,” he said at the Asia-Pacific Economic Cooperation. China’s crude oil imports in 2023 record high.

“There’s a transition part, which is moving trucks to LNG, and then there’s a soft economy. So a half-million barrels per day reduction,” he said, adding that the worst of the transition period may be over.

China’s oil demand has been declining According to the International Energy Agency, this was due to a decline in industrial input. The agency’s preliminary data also suggested continued weakness in oil imports in July as China’s crude imports fell to their lowest level since 2022 amid China’s strict lockdown. China’s crude oil imports fell 7% in August.

On the supply side, black oil production in the United States, One of the world’s largest crude oil producersCurry said this year’s performance was “flat.” Black oil includes crude oil, fuel oil, furnace oil, asphalt and tar. White oil includes gasoline and kerosene.

“The United States is producing record amounts of liquid natural gas. Liquids are not oil… When you look at oil, U.S. production is flat this year,” Currie said.

“The key issue is that the market has vastly overestimated the (oil supply) flood, and that’s reflected in record short positions… I’ve never seen anything like it,” he added.

In June, Carlyle said will acquire a portfolio Initial production of natural gas weighted assets Estimated 47,000 barrels Oil every day. According to Reuters, the company reached a $945 million agreement with Energean to acquire the latter’s assets in Egypt, Italy and Croatia.

Other industry observers disagree with Currie’s assessment of the oversupply problem in the crude oil market.

“We are probably producing much more oil on key products than we consume, and that balance is expected to worsen next year,” said Torbjörn Törnqvist, chief executive of commodities trading company Gunvor.

Jim Burkhard, head of research for S&P Global Oil Markets, Energy and Liquidity, said the oil group OPEC+ is expected to increase production in 2025, which would be the first increase in three years, exacerbating concerns about oversupply.

last week, Members of the alliance have postponed a plan to increase production by 180,000 barrels per day in October by two months. The move was supposed to be part of a broader plan to return 2.2 million barrels per day of oil to the market in the coming months.