Raymond James expects record oil supply this year if prices recover

According to data analyzed by Raymond James, this year will see the highest amount of new oil supply in a decade that will reach almost 3 million barrels per day. The major drivers of this growth will be such projects as the Tengiz field in Kazakhstan and the Bacalhau field in Brazil. However, this scenario is only possible if oil prices recover.

Meanwhile, Clyde Russell of Reuters draws attention to oil demand dynamics in China. As he says, the demand projections were quite bullish. At the same time, import data showed a decline. Nevertheless, given that China was importing crude at record-smashing rates earlier, the current figures may indicate the normalization of demand patterns, the expert believes.

Major global organizations forecast an oversupply in the oil market this year, OilPrice.com notes. Estimates range from 100,000 to 600,000 barrels per day.

At the moment, oil companies continue to face difficulties in increasing production, as it is simply uneconomical at current prices. Besides, some of the OPEC+ member countries are bound to cut production as part of the agreement, the agency reports.