OPEC + has agreed to keep its schedule for a gradual increase in monthly production, which caused a jump in crude oil prices.
Ministers ratified a 400,000-barrel-a-day increase in deliveries, scheduled for November, following a brief video conference Monday. Entering the negotiations, there was speculation that they could announce a larger increase in supply, but no such proposal was made.
West Texas Intermediate Crude Oil jumped 3.3 percent to $ 78.38 a barrel in New York – the highest level in almost seven years.
The agreement comes as OPEC + appears to be firmly in control of the oil market. The raw material is traded at perennial peaks without causing a jump in its competitors. The cartel’s production policy will be the main factor influencing prices in the coming months.
However, there is growing concern among key energy-consuming nations as prices rise for raw materials such as natural gas, food and metals. There are tangible concerns that rising inflation could disrupt the economic policies of many countries.
The Organization of the Petroleum Exporting Countries and its allies have regained their remarkably stable positions after more than a year of unrest. The internal conflicts caused by the pandemic – from a vicious price war between Russia and Saudi Arabia to disputes between the Gulf allies over production quotas – seem like distant memories.
Monday’s agreement “will allow us to continue to normalize the market situation,” Russian Deputy Prime Minister Alexander Novak said in a speech at the meeting, part of which was broadcast on the state-run Russia 24 television channel. OPEC + ministers will meet again on November 4th, according to a statement from the group.
If there is a threat to the delicate balance achieved by OPEC +, it is the possibility of bearing the effects of external crises. The shortage of natural gas, which has brought fuel prices to the equivalent of $ 190 a barrel, has boosted the shift to heating and production petroleum products, boosting total demand by about 500,000 barrels a day, according to Amin Nasser, executive director of Saudi state oil company Aramco. .
U.S. oil production is still recovering from Hurricane Ida, which destroyed a total of nearly 35 million barrels after hitting the Gulf of Mexico a month ago – the equivalent of nearly two full months of an increase in OPEC + supplies. Goldman Sachs Group Inc. said it now forecasts Brent to rise to $ 90 a barrel from about $ 81 at the time of writing.
Washington is pleased with the current rate of increase in OPEC + supplies, a US official said ahead of the meeting. In talks with the Saudis in recent days, the Americans have clarified that they urge OPEC + to remain vigilant about any potential changes in the balance between supply and demand, especially in the event of any “overflow” of the natural gas market. Riyadh and Washington have agreed to stay in close contact and continue to monitor the market.
“Saudi Arabia wants to limit oil market volatility if necessary,” said Sen. of Energy Aspects.
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