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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    UAE: The current “OPEC Plus” agreement on oil production is unfair

    Rocky
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    UAE: The current “OPEC Plus” agreement on oil production is unfair Empty UAE: The current “OPEC Plus” agreement on oil production is unfair

    Post by Rocky Sun 04 Jul 2021, 8:31 am


    [size=32][rtl]UAE: The current “OPEC Plus” agreement on oil production is unfair[/rtl]


    July 4, 2021
    39

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    [You must be registered and logged in to see this image.]The OPEC logo at the organization's headquarters in Vienna
    © AFP/AFP/Joe Clamart Archiveشيف

    Abu Dhabi (AFP) - The UAE on Sunday criticized a plan being negotiated among members of the "OPEC Plus" alliance to extend the current strategy to reduce oil production, and considered the agreement "unfair", calling for a review of production rates to accept it.
    In a dispute that may hinder the recovery process of the crude market after the Corona pandemic, the UAE’s push to increase its main production line led to the derailment of the meeting of the Alliance of Oil Producing Countries last week and the failure to reach an agreement.
    "Unfortunately, the Ministerial Committee of OPEC + offered only one option, which is to increase production, conditional on extending the current agreement to December 2022, and it is an unfair agreement for the UAE in terms of the base point of reference for production quotas," a statement published by the UAE government news agency said.
    The statement continued, quoting the Ministry of Energy, "The current agreement continues until April 2022, and the UAE does not mind extending the agreement if necessary, but it requested a review of the base points ratios for the reduction reference to ensure fair quotas for all members upon extension."
    The UAE proposes to take the extension decision “at a later meeting with the aim of allowing an immediate decision to increase production from August until the end of the current agreement.”
    Attention will turn to Vienna on Monday, when a new meeting will be held starting at 13:00 GMT.
     
    - increase production -
    Last Friday's talks included a meeting of the 13 OPEC members led by Saudi Arabia, followed by a technical meeting and discussion among the 23 OPEC Plus members. The broader group includes Russia, the world's second largest oil producer.
    Analysts from the “Deutsche Bank” consulting group said that the discussions were complicated by the UAE’s last-minute objection to a Russian-Saudi deal reached earlier, which is the extension until the end of 2022.
    A Russian government spokesman declined to comment when asked if the current impasse could lead to a crisis similar to the one the world witnessed in March 2020.
    A dispute at the time between Moscow and Riyadh led to the decline in the price of US crude to below zero for the first time in history.
    The UAE insists on raising the main production line by 0.6 million barrels per day to 3.8 million barrels, which allows it to unilaterally increase production within the current quota, according to Deutsche Bank experts.
    According to an expert at the Rystad Center for Energy Research, Louise Dixon, "Negotiations (...) will be difficult because OPEC Plus understands that if the UAE is allowed to produce from a different base, other members may protest."
     
    - Ongoing meetings -
    And on Thursday, Bloomberg Financial News Agency quoted an undisclosed source who expected a return to a production volume of two million barrels per day by the end of 2021, at a rate of 400,000 barrels per day every month starting from August, an option that was not approved on Thursday.
    This is in line with the general strategy that “OPEC Plus” has been following since May: gradually increasing production after reducing it significantly with the massive decline in demand since the outbreak of the Covid pandemic.
    Since the start of the economic crisis, the organization has been holding almost monthly meetings to coordinate a joint response, and its strategy has succeeded in driving prices higher, and they are now at levels not seen since October 2018.
    The alliance must now navigate a complex market with high demand that remains fragile, as well as the potential complexity of the return of Iranian exports.
    In addition, the current high prices are causing grumbling from major crude oil consumers such as India, while Abu Dhabi's strong position pits it against its traditional ally and neighbor Saudi Arabia, the world's largest oil exporter.
    According to Bloomberg, the UAE proposed the idea of ​​leaving “OPEC Plus” in late 2020, in order to pump more oil and benefit from the huge investments it made to expand production capacity.
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