The OPEC + Group will meet this Thursday to determine production levels for production from May. The price of volatile oils is well above $ 100 a barrel, so the group’s decision could be the most influential to date.
Nevertheless, the market primarily assumes that OPEC + will stick to a pre-planned production quota increase of 400,000 barrels per day. With an off-chance that OPEC + agrees to roll back the planned 400,000 barrel / day production cut in May, the group is in fact mostly just because it is not yet in line with current quota levels. It is unlikely that we will be able to increase production to 400,000 barrels / day, which one would agree with. Higher one.
OPEC + has shown indifference to market bailouts fighting high crude oil prices. This has spilled over into high gasoline prices. This is a daunting reality for the Biden administration. The G7, IEA, and specifically the United Kingdom and the United States, Saudi Arabia and the UAE (both coordinated by the OPEC + agreement with Russia) are giving oil begging a cold shoulder.
Russia is not alone in OPEC’s reluctance to pump more oil. The UAE has opposed those who have blamed the oil industry for the past few years in pursuit of an energy transition, and blamed those who have called on the oil industry to pump more oil. .. Several OPEC + members have a history of following their ferocious momentum, even if it leads to poor decision making. Anyone over the age of two will remember the oil price war from April 2020, when Saudi Arabia and Russia began to flood the market. We used oil after the OPEC + production cut contract failed because the coronavirus robbed oil demand and plunged prices in a spectacular way.
The UAE’s ambassador to Washington confused the outlook for the meeting earlier this month when UAE said it would support increased production and encourage OPEC to consider increasing production. Many saw it as a precursor to the future. OPEC + continues to rely on Russia’s blessings for group decisions.
Related: Russia’s oil exports fell 26% last week
The latest signs from the frank UAE came when UAE Energy Minister Suhail Al-Mazrouei said, “If the market is balanced and the resources are in the market, we will not add resources.”
This is the same as the previous OPEC comment that has argued that today’s soaring oil prices are not a matter of supply and demand fundamentals, but of geopolitics.
United Arab Emirates and Saudi Arabia are also unlikely to increase production without the support of the group. We can do so in terms of capacity because it violates the OPEC + Agreement that we have been working hard to maintain. Russia is primarily expected to loudly oppose the increase in older production beyond what the group has already planned.
By Julianne Geiger at Oilprice.com
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