5 September 2022
Petrol station
Oil prices rose by more than 3 percent on Monday, which is due to an increase in profits for the producing countries, with members of the “OPEC Plus” agreeing to reduce production slightly in order to support prices.
The price of Brent crude, supplied for the month of November, rose $3.43 to $96.45 a barrel.
The price of West Texas Intermediate crude also rose by $2.94 to reach $89.87 a barrel.
The Organization of Petroleum Exporting Countries “OPEC” and its allies, in the “OPEC Plus” organization, will reduce production by one hundred thousand barrels per day, and this does not exceed 0.1 percent of global demand for the month of October.
It was also agreed to hold a meeting at any time to adjust the production level before the next scheduled meeting on 5 October.
And Archyde.com news agency quoted analyst Craig Erlam as saying: “It is the symbolic message that the organization wants to send to the markets more than anything else,” adding that the increase in production by one hundred thousand barrels that OPEC Plus carried out last month was not of great value.
And Saudi Arabia, one of the major producers in OPEC, had indicated last month the possibility of reducing production to deal with what it sees as an “exaggerated drop in prices.”
Russia, the second largest oil producer and an important member of the OPEC Plus group, does not support production cuts at the moment, and the group is expected to decide to maintain the production level as is, according to the Wall Street Journal, citing an informed source on Sunday.
Oil prices had fallen during the past three months from the highest level they reached in March due to the impact of the spread of Covid in China and the possibility of this affecting economic growth, as well as fears of an increase in the bank interest rate.
It has eased lockdown measures in southern China’s tech hub of Shenzhen while remaining on the lookout.
Meanwhile, talks aimed at reviving the 2015 nuclear deal with Iran that heralded a boost in global oil production ended with the United States rejecting Iran’s demand to link the agreement to the closure of investigations by the International Atomic Energy Agency, according to a Western diplomat.
It is expected that the use of oil in generating electricity will increase, according to analysts, after Russia announced that it would stop pumping gas through the “Nord Stream” line due to a technical defect.
The International Energy Agency has increased its forecast for oil demand, with its expectation of a shift from gas to oil in some countries.