OPEC Chief sees high risk of oil squeeze amid bullish demand

Global oil markets face a high risk of a supply squeeze this year as demand remains resilient and spare production capacity dwindles, the new head of OPEC said.
Fears over slowing consumption in China and the wider world - which have pushed crude prices 16% lower this month - have been exaggerated, OPEC Secretary-General Haitham Al-Ghais said.
At the same time, producers in the Organization of Petroleum Exporting Countries and beyond are running out of extra supplies they can bring to market, Al-Ghais said. "We are running on thin ice, if I may use that term, because spare capacity is becoming scarce," Al-Ghais said. "The likelihood of a squeeze is there."

International oil prices have retreated to near $90 a barrel amid signs of a slowing economy in China - where fuel use slumped to a two-year low in July - and a lackluster holiday driving season in the US. Still, the OPEC chief remains confident that world oil demand will increase by almost 3 million barrels a day this year, bolstered by China's return from Covid-related lockdowns.

"China is still a source of phenomenal growth," he said. "We haven't seen China open up exactly -- there's a strict Covid Zero policy -- I think that will have an impact when China gets back to full steam."