Monday, December 5, 2022
HomeUAE BusinessAs prices rise, oil production policy decisions become the focus

As prices rise, oil production policy decisions become the focus

As prices rise, oil production policy decisions become the focus

Logo for the headquarters of the Organization of Petroleum Exporting Countries (OPEC).

Omar Max | Light Rocket | Getty Images

LONDON – According to CNBC’s Brian Sullivan, OPEC and non-OPEC ministers met on Friday without a resolution, and they will meet again on Monday to discuss oil production policy.

The Energy Alliance, commonly referred to as OPEC+, decided through a video conference on Friday afternoon whether to keep the output policy unchanged or to further increase the supply.

According to Reuters, citing OPEC+ sources, OPEC+ outside the United Arab Emirates agreed to relax production cuts and extend them until the end of next year. According to Reuters, the UAE stated that the condition for the postponement is to modify its benchmark output.

Affected by this news, oil prices rose slightly on Thursday, and lost momentum on Friday as traders digested the impact.International Brent Crude oil futures traded at US$76.03 per barrel, up 0.2% on the day, while West Texas Intermediate The settlement price of futures on Friday fell by 7 cents to US$75.16 per barrel.

Reuters quoted an unnamed OPEC+ source as saying that the OPEC alliance agreed in principle to increase the supply of 400,000 barrels per day from August to December 2021 to meet growing demand.

According to Reuters, the major OPEC country Saudi Arabia and non-OPEC leaders Russia also proposed to extend the period of production cuts to the end of 2022.

However, Reuters reported that the UAE opposes these plans on the grounds that OPEC+ should change its production reduction benchmark and effectively increase its production quota.

Increasing tension

Oil price

Supported by the launch of the Covid-19 vaccine, the gradual relaxation of blockade measures, and the large-scale production cut of OPEC+, oil prices have risen by more than 45% so far in the first half of this year.

Wall Street’s U.S. investment bank is still bullish Enough space to run In the next few months.

As the oil price outlook is promising, the world’s three major forecasting agencies-OPEC, the International Energy Agency and the U.S. Energy Information Administration-expect the demand-led recovery to accelerate in the second half of 2021.

However, the global spread of the delta Covid-19 variant has exacerbated concerns about frustrated oil demand. For example, new lockdown measures and rising costs have led to a slowdown in the growth of Chinese factories.

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