Oil glut to remain despite Opec+ pact

The glut of oil in the market is still a problem even though the Opec+ grouping has agreed to reduce production until 2022, Energy Policy and Planning Office director Wattanapong Kurovat said.

As of April 13, the cost of retailed diesel in the country increased by Bt0.07.

Wattanapong said the oil price would continue to decrease, although production capacity will be reduced in line with the Opec+ agreement.

Analysts have said that cutting back on oil production will not be enough to remove market oversupply, which is happening because of the Covid-19 crisis.

Trafigura, one of the world’s leading independent commodity trading and logistics houses, has forecast that demand for oil in April would drop to a daily 35 million barrels. It also predicted that decreased oil prices would pose a problem for the US energy industry.