Monday, June 17, 2024

OPEC + will explore options to increase oil supply to the market through Reuters


© Reuters. The OPEC logo is in a photo from the Reuters archive with the flags of the member countries

(Reuters) – OPEC + is considering going beyond its current contract to increase production by 400,000 barrels a day when it meets next week, sources say, as oil approaches three-year highs and is under pressure to pump more goods from consumers.

The Organization of the Petroleum Exporting Countries (OPEC) and its Russian-led partners, within the framework of the OPEC + Group, agreed to increase production by 400,000 barrels per month in July, reducing production by 5.8 million barrels per day. It convenes on Monday to review its production policy.

Four sources at OPEC + said one of the expected scenarios was an increase in oil supplies, but none of them gave details of what month or what would be. Another source in OPEC + is the potential scenario of increasing production to 800,000 barrels a day in a month, which will not see any increase next month.

Since the last meeting decided on the level of OPEC + production in October, the initial month in which any increase is likely is November.

“We cannot rule out any option,” one of the OPEC + sources said. Another source said the idea that the oil market needed more oil than planned in the current deal was a “possible scenario”.

Sources told Reuters on Wednesday that the group ‘s decision to stick to its current plan was largely a foregone conclusion.

It is not yet clear why the tone has changed, but it came after a meeting of the OPEC + Joint Technical Committee, which reviewed market expectations and lowered expectations for supply surplus in 2022.

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Negotiations between the members continue ahead of the remote OPEC + meeting on October 4, and agreement on further increases has not been confirmed.

It soared to a three-year high of more than $ 80 a barrel on Tuesday as demand in the United States increased after unplanned shutdowns and damage caused by the epidemic. Thursday prices were below $ 79.

The White House, which has been concerned about higher prices in August, said it was in contact with OPEC on Tuesday and was exploring how to deal with oil prices.

India, the world’s third-largest oil importer and consumer, said on Tuesday it would accelerate the transition to more cost-effective alternative energy sources.

OPEC members The energy ministers of Iraq, Nigeria and the United Arab Emirates have said in recent weeks that there is no need to take extraordinary steps to change the current agreement.

(Produced by Mahmoud Salamah for the Arabic Newsletter)

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Nadia Barnett
Nadia Barnett
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