LONDON (Archyde.com) – OPEC Plus sources said today, Wednesday, that the oil producers’ bloc agreed to abide by plans to increase production by 400,000 barrels in April, despite a sharp jump in prices amid sanctions once morest Russia over its military attack on Ukraine. Oil topped $110 this week, its highest level in nearly eight years, as Western sanctions tightened the noose further on Moscow, disrupting supplies from Russia, the world’s second-largest oil exporter. The measures taken by the West have also caused problems with exports from Kazakhstan, which is also a member of “OPEC Plus”, which is made up of the Organization of the Petroleum Exporting Countries (OPEC), Russia and allied oil-producing countries. And “OPEC Plus” has increased production by 400,000 barrels every month since last August, in the context of reversing the production cuts they had decided due to the decrease in demand for oil due to the Covid-19 pandemic. Four sources in “OPEC Plus” said that the ministers in the bloc agreed to abide by the existing production plans during an online meeting that lasted less than a quarter of an hour. This also came following a recommendation not to change the existing plans at the meeting of the Joint Ministerial Monitoring Committee. “The participants rejected the geopolitical tension as an influencing factor in the meeting,” a source said earlier, in reference to the preparatory talks that took place earlier, and affirmed their commitment to the basic factors. Russia described its actions in Ukraine as a “special operation” and said it had no intention of occupying it. The United States has repeatedly called for an increase in the bloc’s production. Yet very few countries have the additional capacity to increase production. The remaining effective cuts to OPEC Plus production due to the pandemic are 2.6 million barrels per day, and the bloc is expected to recover it by the end of next September. With demand recovering strongly due to the decline in the impact of the pandemic, oil prices jumped to sharp levels.
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Falling oil prices .. and “OPEC +” sticks to its production plans
written by Alexandra Hartman Editor-in-Chief
Oil prices fell slightly during the morning trading of Thursday’s session, following limited gains achieved at the closing of the previous session.
By 5:34 GMT, Brent crude prices fell 0.36 percent to $89.15 a barrel, and US Texas crude fell 0.46 percent to $87.85 a barrel.
Oil prices closed Wednesday’s session with limited gains following the OPEC + group stuck to its plan for moderate production increases, despite pressure from large consumers to raise production at a faster pace.
The global benchmark Brent crude contracts ended Wednesday’s session, up 31 cents, to settle at $89.47 a barrel, while US West Texas Intermediate crude contracts increased six cents to close at $88.26 a barrel.
Brent has remained close to the level of $ 90 a barrel for a few days now, supported by continuing concerns regarding tight supply from major global producers and a steady increase in demand.
On Friday’s session, the two benchmark crudes recorded their highest levels since October 2014, as Brent touched $91.70, and US crude scored $88.84.
The US Energy Information Administration said Wednesday that US crude stocks fell by 1 million barrels last week, versus expectations for an increase of 1.5 million barrels. Distillate stocks also fell amid strong demand domestically and in export markets.
increase production
The 23 members of the OPEC + group, led by Saudi Arabia and Russia, announced on Wednesday a new slight increase in production, despite the rise in crude prices and geopolitical tensions shaking the markets.
These countries confirmed in a statement that they would increase their production by 400,000 barrels per day in March, the same amount as in previous months.
The group, which includes 13 members of the Organization of Petroleum Exporting Countries (OPEC) and their ten allies within the “OPEC +” agreement, had resisted US pressure to increase production in order to reduce prices.
The OPEC + alliance said in a statement following a ministerial meeting in the video department that the decision was taken “in light of the fundamentals of the current oil market and consensus on expectations.”
The group’s cautious approach dates back to the spring of 2021 as demand recovers following massive production cuts under Covid.
Edward Gardner, an expert at Capital Economics, said Wednesday’s announcement “was not surprising given that the group followed this approach strictly since it was originally agreed, and even in December when oil prices fell in the wake of the Omicron outbreak,” according to “AFP.”
He added, “What matters in the future is whether OPEC + is able to keep pace with the planned production increases.”
And the expert at Interactive Investor, Victoria Scholar, indicated that she expects an “additional rise” as a result of steadily continuing demand and the policy of “a very slight increase in production” followed by the “OPEC Plus” alliance.
geopolitical tension
The “OPEC Plus” alliance is facing difficulties in producing what is commensurate with the specified quotas with some of its members, such as Angola and Nigeria, who are unable to raise production, and other members such as Saudi Arabia and the UAE that are not willing to do so, according to Carsten Fritsch of Commerzbank.
According to a “Bloomberg” statistics, the total production of “OPEC +” increased in December by only 90,000 barrels per day, which is far below the target of 400,000 barrels per day.
Russian Energy Minister Alexander Novak told Rossiya 24 television that Russia respects its commitments.
However, he added, there are “a number of uncertainties” casting a shadow over demand as the coronavirus epidemic continues to spread.
The high level of geopolitical tension associated with a number of the most prominent oil-producing countries, such as Russia, Saudi Arabia and the UAE, contributed to the increase in prices.
The Iranian-backed Houthi rebels, who have repeatedly targeted Saudi Arabia, launched three missile attacks once morest the UAE last month, the last of which occurred on Monday.
The UAE participates in the Saudi-led military coalition in Yemen in support of the Yemeni government once morest the Houthis. In 2019, it withdrew its forces from the poor country that has been mired in armed conflict since 2014, but it remains an influential player in it.
In Europe, tension between Moscow and the West reached its highest level since the Cold War following Russia massed forces on its border with Ukraine.
Markets.com’s Neil Wilson said the tension “between Ukraine and Moscow will continue to raise (prices) as long as the situation gets worse.”
TOKYO (Archyde.com) – Retreated oil prices Today, Friday, following rising to a seven-year high this week, as an increase in US crude and fuel inventories prompted investors to take profits from the rally.
Brent crude futures fell $2.46, or 2.8 percent, to $85.92 a barrel by 01:36 GMT. Contracts had earlier fallen 3 percent, the biggest decline since December 20. The global benchmark touched $89.50 a barrel on Thursday, the highest level since October 2014.
US West Texas Intermediate crude futures fell $2.61, or 3.1 percent, to $82.94 a barrel. US crude contracts fell earlier 3.2 percent, which is also the biggest decline since December 20, following rising to its highest level since October 2014 on Wednesday.
It seems that the recent increase in crude prices lost momentum on Thursday when Brent and US crude ended the trading session with modest losses. The benchmark has risen more than 10 percent since the beginning of the year amid fears of tight supplies.
Gasoline stocks in the United States, the world’s largest oil consumer, rose 5.9 million barrels, to the highest level since February 2021, according to the US Energy Information Administration. Crude stocks rose 515,000 barrels last week, missing industry expectations.
Administration data also showed a limited decline in crude consumption in refineries, which indicates a decline in demand.
The International Energy Agency said on Wednesday that oil supply is expected to exceed demand soon, as some producers are expected to pump at or above all-time highs, while demand holds up despite the spread of the Omicron from the Corona virus.
OPEC, on Tuesday, stuck to its forecast of a strong increase in global oil demand in 2022 despite the mutated Omicron strain of the Corona virus and expected interest rate increases, expecting the oil market to remain well supported during the year.
The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that it expects global oil demand to rise by 4.15 million barrels per day this year, unchanged from its forecast last month.
The Organization of the Petroleum Exporting Countries said in the report that “monetary measures are not expected to disrupt the primary momentum of global economic growth, but rather work to re-evaluate the economies experiencing inflationary growth.”
“The oil market is expected to remain well supported throughout 2022,” she added.
Global consumption is expected to exceed 100 million barrels per day in the third quarter, in line with last month’s forecast. On an annual basis, according to OPEC, the last time the world consumed more than 100 million barrels per day of oil was in 2019.
“Although the new Omicron strain may have an impact in the first half of 2022, which depends on any further lockdown measures and increased rates of hospitalizations affecting the workforce, the outlook for economic growth remains strong,” OPEC said.
And the OPEC + group began to gradually retreat from the record production cuts that were implemented last year. The group agreed at its last meeting to increase monthly production by 400,000 barrels per day in February, despite concerns regarding the new strain.
The report showed that OPEC production in December rose by 170,000 barrels per day to 27.88 million barrels per day, which is less than what OPEC is allowed under the agreement.
(Archyde.com)
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