There is a high risk of oil prices falling because of a small increase in demand and higher OPEC+ production, an executive of shipping firm Maersk told the APPEC conference in Singapore on Tuesday.

“I think there’s a high risk to the downside for sure when it comes to kind of overall global balances,” said Emma Mazhari, CEO of oil trading for Maersk, pointing to a Sunday announcement from OPEC+ that it would raise production further from October amid weak oil demand growth.

The group that pumps about half of the world’s oil in April began reversing its output cuts, partly as Saudi Arabia sought to punish other members such as Kazakhstan for overproducing.

While aiming to boost quota compliance, the output hike is also helping to meet a rise in domestic demand from sectors such as power generation, Mazhari said, which has so far limited any impact on the global market.

“There’s not that much additional exports in the market so far from the additional OPEC+ supply,” she added.

However, Trafigura chief economist Saad Rahim said while there might be a lag in supply coming to the market, supply will increase over the next 12 months.

Saudi Aramco, which cut its latest official selling prices on Monday, is keen to sell more oil, he added.

The executives were also pessimistic about the outlook for demand, expecting U.S. tariffs to dent global economic growth and weaken fuel consumption.

“The macro risks are very much to the downside, not just U.S., but potentially spilling over elsewhere,” said Rahim.

Global benchmark Brent crude futures BRN1! hovered around $66 per barrel on Tuesday, down from around $75 per barrel at the beginning of this year.
Source: Reuters