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00:00A lot of the folks of course is on OPEC. Plus happy New Year. What are you expecting them to to decide to go back. Plus should just carry on with the plan 400000 barrels per day. I think that's very much been on the cards for a while especially after the data. And you were just talking about it suggesting that Americans should be or is milder hospitals on getting overwhelmed and that demand actually isn't taking as big a hit as some had feared. I think that's going to be the biggest change versus the December meeting. And I think that should give them a lot of assurance to just go ahead with their planned increases. Same reason no concern that the market can absorb this particular when we look at what's happening with the airlines. Well the thing is right. Like even if they add 400000 barrels. But in terms of the quota increases. Well we have been seeing is that actual barrels coming to the market is much much less in January. We only expect hundred and thirty thousand barrels per day off that 400 to hit the market. In fact that number on our balances is only about 250. Every country outside of the kind of core Middle Eastern group is underperforming particularly West Africa Nigeria. We've seen multiple force measures. And this underperformance because of underinvestment in Saudi Arabia in particular knows this. Even if that headline number is 400 what's coming to the market is actually half of that if at all maybe even less. And that's I think that is a very important point to reiterate because you're not seeing 400 come to the market. Yeah. Yeah. And we have a great chart. I mean it is true something that they promise and then don't exactly deliver on. And we've seen that in the last couple of years. I mean I think really front from the day that OPEC's started Rita. Overall how difficult is it to to forecast how much demand for oil there will be from China. All right now it's very very tricky because China is embarking on a slightly more longer term policy which has been around reducing emissions or at least energy intensity and that has now included key a key energy sector such as refining and petrochemicals. So we aren't seeing China give out as many crude import quotas as in the past or more importantly give product that's gold is usually you should have product export quotas announced before the end of the year. We still don't have those numbers. So it's very difficult for refineries to plan. Of course domestic demand is fine and they will run for that. But China is also very big products exporter and they can run for that right now because they don't have product export quotas. So I would say this this is a this is a paradigm shift in the market. Like China's not going to be what we've seen in the last five to 10 years. But it does mean other countries like India Korea they will have to run more because ultimately as demand picks up somebody will have to service that when it comes to the question of Iran. Some modest improvement or least modest I guess progress in terms of negotiations in Vienna. To what extent is it too early to start pricing in additional Iranian oil on this market. So we start looking to the second half of this year or is it still a long way from that. It's still a long way from that. I mean we own our balances. We've got Iranian barrels coming back from September. But you know the way the talks are progressing Iran is dragging its feet. And even negotiators on from the West and the US the rhetoric has gotten stricter or you know a peace that kind of headlines. We are seeing. So talks are going to take some time. Yes. To be honest on in our view a lot of concession needs to be made. Yes there's been some progress but it isn't going nearly as smoothly as even the West were hoping for. I mean what do you do with gas prices right now. So natural gas prices surged for a second day in Europe. This is as you know Russia is shipping a little bit less gas. And at the start at the really start of the year do prices just go higher. And how much pressure does that put on energy supplies. I mean look gas has been it's been a yo yo you saw as seen that over December. Right. There was a great chart going around that the ETF carved was basically like the Christmas tree. It went up all the way. Then came back down again. But we we are bullish now. European gas prices. Yes. The winter hasn't been particularly cold in Europe. But again this is the start of January. We still have a good few weeks to go. And yet again it's to do with Russian supplies. And ultimately we are seeing and we've been seeing this for some time that some prices will have to go up because we need to refill the storage which is a very very low level. So with gas prices where they are I mean look Saudi Arabia wants oil out of the limelight. I think they're going to get that because you know compared to gas not even the volatility. But even on a levels basis it's nowhere close to that. So yeah. Well we do expect gas to continue being very strong. Amrita Seventy nine dollars a barrel something the sweet spot arguably for OPEC. Plus what is your forecast for 2022 for these prices. We've been forecasting eighty five dollar Brent for some time now for a few years for 2022 mostly predicated on the fact that yes we are going to be coming out of cold winter demand will be slower to recover in the first half. But you know second off should be a lot stronger. But it's mainly to do with the supply side underinvestment spare capacity. I mean we just talked about it from OPEC's point of Europe plus his point of view. We just don't have the spare capacity. I mean look at Russia. Despite rising quotas their production was flat month on month in December. That tells you a lot. And we just know that as demand rises the supply won't be able to keep up with it. And that just means it's going to be higher prices heading well into the 90s by year end.

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European Gas Prices Will Be Strong, Says Energy Aspect’s Sen

Amrita Sen, founder of Energy Aspects, discusses today’s OPEC+ meeting, oil demand from China and her outlook for natural gas prices. She speaks on “Bloomberg Markets: European Open.” (Source: Bloomberg)

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