Oil markets are holding their breath as they await the results of today's OPEC + meeting
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Economy News - Baghdad
Oil prices rose to about $ 62 a barrel as investors awaited the outcome of the important policy meeting of the "OPEC +" coalition later in the day, with no clear direction for the amount of supplies that the alliance pumped to the market that is witnessing a decline in oil supply.
The "OPEC Plus" alliance includes the member states of the Organization of Petroleum Exporting Countries (OPEC) in addition to other producers led by Russia.
Warren Patterson, head of commodity strategy at ING Bank, which expects to increase production by 1.5 million barrels per day, including the restoration of voluntary cuts by Saudi Arabia, said: “It is clear that the results of today's OPEC Plus meeting are fundamental to the trend. market".
Accommodate extra supply
"The market can easily absorb the additional supply, and in fact it will be able to absorb more oil supplies," he added.
US West Texas Intermediate crude rose 0.8%, after rising 2.6% on Wednesday, as prices received support from a record low in US fuel inventories, and Brent crude also rose.
Saudi Arabia and Russia, the two most influential countries in the "OPEC Plus", held talks on Wednesday to seek common ground on production, as Riyadh urges caution, but Moscow is seeking to increase supplies, according to a delegate.
Dealers also follow developments in the Middle East. According to a report by the American "Associated Press", the Houthi rebels in Yemen said that they bombed a Saudi oil facility in the coastal city of Jeddah with a missile on Thursday.
Oil prices rose so far from 2021 after the "OPEC Plus" alliance reduced production collectively to push for a rebalancing of the turbulent market due to the outbreak of the Corona epidemic.
Strong supply management has helped deplete stocks, while demand is recovering worldwide thanks to the deployment of Corona vaccines.
This has raised widespread expectations that Alliance Plus, the largest single player in the global energy market, will increase production.
Veteran OPEC watchers still expect the alliance to pump some additional barrels, and there is little chance to keep production at current levels.
Two elements are under discussion: Will the coalition increase collective production by 500,000 barrels per day in April? Second, how will Saudi Arabia gradually cancel the additional one million barrels per day (bpd) cuts it was voluntarily making?
Warren Patterson, head of commodity strategy at ING, expects OPEC Plus to do both.
West Texas Intermediate crude futures for April rose 0.8% to $ 61.79 a barrel at 12:56 pm in Singapore.
West Texas Intermediate crude has increased by 27% so far from 2021.
Brent crude futures for May rose 0.9% to $ 64.67 a barrel, after rising 2.2% on Wednesday.
With the start of the "OPEC Plus" meeting approaching, traders realize that the Kingdom of Saudi Arabia has developed a desire for sudden actions.
Saudi Energy Minister Prince Abdulaziz bin Salman pushed prices up during a meeting in January 2021, by announcing a unilateral production cut in a reassuring or calm market.
Citigroup advised its clients not to bet on the alliance meeting scheduled for later in the day, because "there are many unforeseen scenarios, according to Ed Morse, global head of commodity research."
Russian Deputy Prime Minister Alexander Novak clarified his position on Wednesday, saying that while there are many risks including closures, "if we look closely at the market situation, it is much better than it was a year ago, than it was in the fall."
The OPEC Plus meeting takes place in light of the availability of a large number of indications that energy consumption is improving in the major economies, due to the decline in the number of regions that are witnessing closure due to Corona.
Among the recent positive numbers, data showed that US travel is slowly returning to normal, and predictions that fuel demand in India will reach a record high. Meanwhile, Europe's roads remain quieter than usual.
The US government figures on Wednesday showed a drop in gasoline inventories by 13.6 million barrels to 243 million barrels last week after a frost wave disrupted the refining sector. At the same time, the pace of purchasing Crude Oil increased.