Can OPEC+ stabilize the global oil market?

[dan_s]

Oilprice.com

Oil prices are gearing up for their largest weekly gain in three weeks after protests across Kazakhstan highlighted the fragility of crude supply. Whilst the immediate impact of riots has been difficult to gauge so far, the uncertainty helped push Brent quotes well above the 80 per barrel mark. Considering that Libya is unlikely to resolve its political impasse anytime soon and will most probably see a third of its nominal output shut-in for a prolonged period of time, supply disruptions seem to be firmly on the table currently. With Russian crude production stagnating for a couple of months already, rising crude prices are increasingly reflecting the supply constraints of oil production today.

LPG Price Hike Triggers Government Collapse in Kazakhstan. The doubling of subsidized LPG prices, a widely used motor fuel in Kazakhstan, to the equivalent of $0.20 per liter, has triggered widespread protests across the Central Asian country, bringing down the government and jeopardizing oil production in western regions.

Kazakhstan Riots Disrupt Oil Production. Oil production at Kazakhstan’s largest 700,000 b/d capacity oil field Tengiz was decreased by its operator Chevron (NYSE:CVX) after some local contractors disrupted train lines in support of anti-government protests.

Extreme Cold Derails Western Canada Production. Canada’s main oil-producing region, Alberta, is under an extreme cold warning with temperatures dropping as low as -40° C, hampering oil sands production due to malfunctioning equipment and pushing gas prices into an unprecedented spike.
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As I have posted here many time: It is my opinion that OPEC+ does not have as much spare capacity as they tell the market. They overstate their capacity because they want oil buyers to have confidence in their ability to meet the needs of their customers. For several months OPEC+ has produced less than their quota.