Friday, June 14, 2024

The “OPEC Plus” result reflects a drop in excess oil and “Omicron” risks.


Analysts and sources said that the outcome of this week’s “OPEC Plus” meeting, in line with the planned increase in oil production for February, reflects the easing of fears of a large surplus of oil in the first quarter. Desire for sustainability in market guidance. The Group of Production Countries, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, decided yesterday to increase production to 400,000 barrels a day next February.

The United States has been pushing for more crude oil to be pumped in to support the global economic recovery from epidemics and quiet prices, which have reached about $ 80 a barrel. However, OPEC Plus said the market does not need much oil. During the talks, ministers and officials scrutinized internal “OPEC Plus” data before last Tuesday’s meeting, which pointed to an increase of 800,000 barrels per day in January and 1.3 million barrels per day in February.

While this is more than necessary, it is far less than the initial estimates that raised concerns. In December, internal OPEC plus figures increased to a surplus of two million barrels per day in January and three million barrels per day in February.

A delegate to the OPEC Plus meeting said: “The picture has improved since the previous end,” referring to expectations for the first quarter of the year. “Reserves are declining,” he said. Other delegates said, “The adjustment is part of an OPEC Plus assessment of some manufacturers’ inability to increase production due to factors that have a limited impact on the demand (Omigron) from the corona virus and restrict production. Capacity keeps the actual increase in supply low. “

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Investors agree that the Omicron effect is small. Oil prices soared to $ 80 a barrel on November 26, leading to a more than 10% drop on the same day as news of the new mutation began to circulate.

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Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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