The OPEC+ states decided to keep the previously adopted plan to increase oil production, despite the growth in demand amid a sharp rise in the cost of natural gas, Interfax reports.
On Tuesday, oil prices continued to rise after a jump of more than 2% the day before.
In accordance with this plan, OPEC+ countries will increase oil production in November by 400 thousand barrels per day (bpd). Before the meeting, during informal meetings, the option of a more vigorous increase in production in the next month (November - ed.) - by 800 thousand bpd was considered, while maintaining the previous plan for December.
The cost of Brent December futures at the London ICE Futures exchange by 8:10 Kyiv time on Tuesday amounted to $81.47 per barrel, which is $0.21 (0.26%) higher than the price at the close of the previous session. As a result of trading on Monday, these contracts rose by $1.98 (2.5%) to $81.26 per barrel, the maximum since October 16, 2018.
The price of WTI November futures at the New York Mercantile Exchange (NYMEX) reached $ 77.72 per barrel by this time, which is $0.1 (0.13%) higher than the final value of the previous session. The day before, the value of these contracts increased by $1.74 (2.3%) to $77.62 per barrel, which is the highest value at the close of the market since November 11, 2014.
“Following a sharp decline in oil production in the second quarter of 2020, OPEC + countries are very slow to increase production, with market demand likely to recover fully by 2022,” said Peter McNally, an analyst at Third Bridge.
After the decision of OPEC+ to increase production by only 400 thousand bpd per month, oil reserves in the world will continue to fall, the expert says.
Saudi Aramco, the Saudi oil company, estimates that the jump in gas prices has already pushed up oil demand by about 500,000 barrels per day as consumers seek to switch from more expensive gas to slightly cheaper oil.
"Oil prices are likely to remain high in the last quarter of 2021 as companies' shift from gas to oil supports demand," said chief commodity analyst at VI Investment Corp. Sangchil Yun.
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