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“OPEC +” agrees to increase oil production by 432,000 barrels per day in June
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Thursday May 5 2022 23:07
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"OPEC +" maintained its production policy to control the oil market (AFP)[/size]
The alliance decides to maintain its production policy to control the market, and crude prices are consolidating its gains, and Brent crude is above $113.
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Thursday May 5 2022 23:07
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"OPEC +" maintained its production policy to control the oil market (AFP)[/size]
[rtl]In line with expectations, and within a record time of less than 15 minutes, the “ [You must be registered and logged in to see this link.] ” alliance decided today, Thursday, May 5 (May 5), to maintain the current production policy in next June, with an increase of 432,000 barrels per day.[/rtl]
[rtl]The decision to stabilize production came in the wake of the 28th ministerial meeting of the alliance, which includes the 13 members of the Organization of Petroleum Exporting Countries "OPEC", led by [You must be registered and logged in to see this link.] , and the ten countries allied with it, including [You must be registered and logged in to see this link.] , which was held virtually via "video conference" technology.[/rtl]
[rtl]The alliance said, in a statement, that the continuation of the oil market fundamentals and consensus on expectations indicate a “well-balanced market,” noting the continuing effects of geopolitical factors and issues related to the ongoing Corona pandemic.[/rtl]
[rtl]The "OPEC +" alliance had kept its forecast for the growth of oil demand unchanged, at the conclusion of the meeting of the Joint Technical Committee, yesterday, Wednesday.[/rtl]
[rtl]The new 29th meeting of the coalition ministers, which produces more than 40 percent of global supply, is scheduled to be held on the second of next June, to discuss production policy in July 2022.[/rtl]
[rtl]“OPEC +” reaffirmed the production adjustment plan and its monthly mechanism, after it was approved at the nineteenth ministerial meeting of the alliance, stressing the critical importance of full compliance, the compensation mechanism, and benefiting from extending the compensation period until the end of June 2022, according to the alliance statement.[/rtl]
[rtl]Established production quotas[/rtl]
[rtl]The "OPEC +" alliance issued oil production quotas scheduled for next June, with an increase in the reference level for five countries, namely Saudi Arabia, Russia, the UAE, Iraq and Kuwait.[/rtl]
[rtl]According to the established production quotas, the total oil production in Saudi Arabia will increase by 114 thousand barrels in June to reach 10.663 million barrels per day, and Algeria's production will increase by 10 thousand to 1.023 million barrels per day.[/rtl]
[rtl]Iraq's production will reach 4.509 million barrels per day, an increase of 48,000 barrels from the current month, and the UAE's production will increase by 35,000 barrels to 3,075 barrels per day.[/rtl]
[rtl]The specialists had expected, in their interview with "The Independent Arabia", that the "OPEC +" alliance would adhere to its plan, and that it would approve the approval of another modest increase in production, during its meeting today.[/rtl]
[rtl]In its previous meeting, held on March 31, the coalition agreed to maintain the current production policy in May at about 432,000 barrels per day. The coalition has stuck to its schedule for gradual monthly increases in supplies since the agreement was concluded in [/rtl]
[rtl]The decision of the oil alliance comes a day after the European Union proposed to impose a gradual embargo on Russia in its toughest measures yet to punish Moscow for its war in Ukraine.[/rtl]
[rtl]So far, the 27-nation bloc has been reluctant to completely cut off its imports of Russian oil and gas, and its plans still do not indicate a complete ban on all member states.[/rtl]
[rtl]The European Union's proposal to ban oil imports from Russia could reduce the country's production by another 10 percent at the end of the year, doubling the actual global supply loss resulting from the Russian war, according to Bloomberg.[/rtl]
[rtl]The European Union has yet to agree on a complete ban on the import of Russian oil, which will be implemented in phases over the next six months for crude oil and refined fuels at the end of the year. The proposals include banning all services associated with the transportation of Russian oil, including financing, brokerage, technical assistance and financial assistance.[/rtl]
[rtl]Europe imports about 3.5 million barrels per day of Russian oil and its derivatives, and gets about 40 percent of its natural gas from Russia. [/rtl]
[rtl]Two sources attending the meeting said delegates had completely avoided any discussion of sanctions against Russia, according to Reuters. [/rtl]
[rtl]The embargo is likely to force Russia to redirect flows to Asia and cut production sharply, while the European Union will compete for remaining available supplies, two factors that will likely support higher oil prices. [/rtl]
[rtl]Callum Macpherson, head of commodities at Investec, said: "(OPEC +) continues to view sanctions on Russia as a West-made problem, not a major supply problem that it should deal with." [/rtl]
[rtl]He added to "Reuters", that only Saudi Arabia and the UAE have the ability to significantly increase supplies, and that "if they do so, the resulting dispute with Russia may end on (OPEC +)."[/rtl]
[rtl]Russian supplies [/rtl]
[rtl]In turn, the Secretary-General of the "OPEC", Muhammad Barkindo, referred to the current uncertainties associated with geopolitical developments and the possible consequences for the oil market, calling on countries to continue cooperation within the historical framework in the interest of oil market stability and economic growth. [/rtl]
[rtl]Barkindo said, in a speech during the meeting of the Joint Technical Committee, yesterday, Wednesday, that other producers cannot compensate for Russian exports, which exceed seven million barrels per day, and that "excess capacity does not exist." [/rtl]
[rtl]"However, its potential loss, whether through sanctions or voluntary measures, is likely to spill over into the energy markets," Barkindo added. [/rtl]
[rtl]The Secretary-General of the Organization of "OPEC" pointed out that the Chinese closure limits the use of transportation fuels and petrochemical raw materials, adding: "This has affected the demand for oil, as some of them indicate that the country is facing the largest shock in oil demand since early 2020." .[/rtl]
[rtl]Barkindo also touched on the second anniversary of the essential role played by the member countries of the "OPEC +" alliance in the wake of the outbreak of the Corona pandemic in 2020.[/rtl]
[rtl]Muhammad Barkindo said, “The out-of-control chaos was met with a historic decision by the (OPEC) and non-OPEC member countries on April 12, a decision that would prove pivotal to help rescue the oil industry from the abyss it has reached, thus helping to revitalizing the global economy. [/rtl]
[rtl]He added, "It was a decision unmatched in terms of scope and duration. A full and transparent commitment to helping restore market balance and stability, and this Joint Technical Committee was vital to its success." [/rtl]
[rtl]surplus production[/rtl]
[rtl]And the Joint Technical Committee of the Alliance raised its estimates of the oil surplus in the market to 1.9 million barrels per day in 2022, an increase of 600,000 barrels per day from previous estimates, amid expectations of a slowdown in oil demand growth this year, according to Reuters.[/rtl]
[rtl]The report, which was prepared before the meeting of the joint technical committee of "OPEC +", also scheduled to be held today, expected that commercial oil stocks in the OECD countries during the last quarter would slightly exceed the average in 2015-2019.[/rtl]
[rtl]The revision of the estimates reflects expectations of weaker growth in oil demand, which was adopted by the Organization of Petroleum Exporting Countries (OPEC) in its monthly report on crude for the month of April.[/rtl]
[rtl]OPEC now expects global oil demand to grow in 2022 by 3.67 million barrels per day, down 480,000 barrels from its previous forecast. The organization cited the impact of the Russian attack on Ukraine, high inflation with the rise in crude oil prices, and the re-emergence of the mutated “Omicron” strain of Corona in China, as reasons for adjusting expectations.[/rtl]
[rtl]Rising prices[/rtl]
[rtl]In the wake of the “OPEC +” decision, oil prices consolidated their gains, today, Thursday, amid concerns about supplies with the European Union proposing plans to impose new sanctions on Russia, including a ban on crude in 6 months, easing concerns about weak Chinese demand.[/rtl]
[rtl]By 14:30 GMT, Brent crude futures rose $3.21 a barrel, or 3 percent, to $113.35 a barrel, after a 4.9 percent rise in Wednesday's session.[/rtl]
[rtl]US West Texas Intermediate crude futures rose $2.90, or 2.7 percent, to $110.71 a barrel, after gaining 5.3 percent during the previous session.[/rtl]
[rtl]Both Brent and US crude rose by about 4.4 and 6.3 percent during last April, to continue recording their fifth monthly gains in a row, which is the longest series of monthly gains since January 2018.[/rtl]
[rtl]Last week, the two benchmarks rose 2.5 and 2.6 percent, respectively, as the possibility of Germany joining other European Union members in a ban on Russian oil increased.[/rtl]
[rtl]Crude prices last March recorded their highest levels since 2008 at more than $139 a barrel after the Russian war exacerbated supply concerns that were already fueling the price increase, while crude gains since the beginning of this year amounted to more than 40%, which led to an increase Inflation has prompted central banks, including the US Federal Reserve, to tighten policy.[/rtl]
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