London — OPEC and its allies will release more oil to the market on Thursday amid significant oil price volatility, the release of US oil reserves, and concerns over new variants of the Omicron coronavirus. Decide if you want to curb the supply.
Brent fell to around $ 70 a barrel, surpassing October’s three-year high of $ 86. November prices recorded the largest monthly decline since the start of the pandemic, as Omicron variants caused fear of overdose.
The Organization of Petroleum Exporting Countries, known as OPEC +, and its allies have resisted the US demand for a faster increase in oil production to support the global economy.
Producers say they don’t want to hinder the recovery of the oversupplied and fragile energy industry.
Under the existing agreement, OPEC + has agreed to increase monthly production by 400,000 barrels / day (bpd), reducing the record cuts agreed in 2020, when demand plummeted due to a pandemic. bottom.
But market uncertainty leaves the next move in balance.
Russia and Saudi Arabia, the largest producers of OPEC +, said they did not need a kneeling reaction to revise their policies before this week’s talks, which began at the online OPEC meeting on Wednesday.
Even before concerns about Omicron surfaced, OPEC + weighed the impact of last week’s announcement by the US and other major consumers to release emergency petroleum stocks to curb energy prices.
President Joe Biden’s administration could adjust the timing of the release if prices fall sharply, Energy Deputy Chief Cabinet Secretary David Turk told Reuters Wednesday.
OPEC + forecasts a surplus of 3 million barrels / day in the first quarter of 2022 after the release of reserves. This is an increase from the previously predicted surplus of 2.3 million barrels per day.
Last year, OPEC + achieved a record production reduction of 10 million barrels per day, about 10% of the world’s supply. It reduced them, so the cuts still in place are about 3.8 million barrels / day.
However, OPEC + is regularly at target levels, as some members are struggling to rebuild production, with production about 700,000 barrels / day less than planned in both September and October. Is below.
By Ahmad Ghaddar, Alex Lawler, and Olesya Astakhova