OPEC + rejects US calls for faster increase in oil production
- OPEC + agrees to add an additional 400,000 bpd from December
- OPEC sources say US can increase oil production on its own
- Russian Novak says economic and COVID headwinds persist
LONDON, Nov. 4 (Reuters) – OPEC and its allies agreed at a meeting on Thursday to stick to plans to boost oil production by 400,000 barrels per day (bpd) from December , despite calls from the United States for an additional supply to curb the rise in prices.
The White House has said Washington will consider a full range of tools at its disposal to ensure access to affordable energy.
All oil producers suffered a drop in their income during the COVID-19 pandemic and, as demand picks up with the global economy, it has allowed them to rebuild their balance sheets. The OPEC + supply restriction supported a rally that pushed global benchmark Brent crude to a three-year high of $ 86.70.
OPEC’s main producer Saudi Arabia has rejected calls for a faster increase in oil supplies from the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC +, citing economic headwinds.
OPEC + sources said the United States has enough capacity to increase production on its own if it feels the global economy needs more energy. Sources said that Saudi Arabia and Russia are increasingly convinced that the price hike will not lead to a rapid increase in output by the U.S. shale gas industry. Read more
Producers fear going too fast, fearing further setbacks in the fight against the pandemic and the speed of the economic recovery, Saudi Energy Minister Prince Abdulaziz bin Salman said on Thursday.
He said oil stocks will see “huge” increases in late 2021 and early 2022 due to slowing consumption.
Russian Deputy Prime Minister Alexander Novak said that since August, OPEC has already added 2 million bpd to the global supply and will continue its plan to add an additional 400,000 bpd each month at the end of 2021 and early from 2022.
“There are signs of lower oil demand in the European Union in October. Global oil demand is still under pressure from the Delta COVID variant,” Novak said, explaining why OPEC + chose not to not add more barrels.
US President Joe Biden on Saturday urged major G20 energy-producing countries with spare capacity to increase production to ensure a stronger global economic recovery.
His statement is part of a larger White House effort to pressure OPEC and its allies to increase supply.
“OPEC + does not appear willing to use the capacity and power it currently has at this critical time of global recovery for countries around the world,” a White House spokesman said Thursday.
“The president believes that Americans should have access to affordable energy, including at the pump, and asked us to continue to monitor the markets and be prepared to use any tools necessary,” the spokesperson said. .
The world’s largest oil producer, the United States, which is not part of OPEC +, saw production drop sharply in 2020 and production has since recovered much more slowly than expected.
OPEC + will meet again on December 2.
Reports by the OPEC team; Written by Dmitry Zhdannikov; Editing by Edmund Blair, Elaine Hardcastle, Kirsten Donovan
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