Vienna – The expectations of oil market analysts are that the OPEC + alliance, when its members meet next Monday, during their periodic review of production, will increase its oil supplies to the markets, after stimulating signs appeared about the rise in global demand due to the easing of closure restrictions.
Sources revealed to Reuters that OPEC + is considering exceeding its current agreement to increase production by 400,000 barrels per day, against the backdrop of oil approaching its highest levels in three years and pressure from consumers to pump more supplies.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, within the framework of the OPEC + group, agreed last July to increase production by 400,000 barrels per day each month to gradually phase out a production cut of 5.8 million barrels per day.
Four sources in OPEC + stated that one of the expected and strongly proposed scenarios is an increase in oil supplies, but none of them gave details of the quantities or they will be in any month.
Another source in the oil alliance indicated that an increase in production by about 800,000 barrels per day in one month is one of the possible scenarios, provided that the next month will not witness any increase.
The earliest month in which any increase can occur is next November, as the last meeting decided the volume of OPEC + production in October.
While one of the OPEC + sources said that “we cannot rule out any option,” another source indicated that the idea that the oil market may need more crude than planned in the current agreement “is one of the possible scenarios.”
Oil industry sources told Reuters last Wednesday that the most likely outcome was that the group would stick to the current plan.
The OPEC + alliance is heading towards increasing its oil supplies to the markets, after stimulating signs appeared about the rise in global demand due to the easing of the closure restrictions.
It was not yet clear why the tone changed, but it came after the meeting of the OPEC + Joint Technical Committee, which reviewed market expectations and reduced expectations for the size of the supply surplus in 2022.
Talks between members are continuing before the OPEC + meeting remotely on the fourth of October, and there is no confirmation of agreement on an additional increase.
Brent crude rose to its highest level in three years, exceeding $ 80 a barrel last Tuesday, supported by an unplanned production halt in the United States and a strong recovery in demand after the damage caused by the pandemic.
Rising oil, gas, coal and electricity prices are adding to inflationary pressures around the world and slowing the recovery.
“The price of oil is clearly a concern,” White House spokeswoman Jen Psaki said Thursday. She added that “high oil prices was on the agenda of National Security Adviser Jake Sullivan when he met this week with Saudi Crown Prince Mohammed bin Salman.”
The administration of President Joe Biden has previously confirmed that it is in contact with members of the Organization of the Petroleum Exporting Countries and is discussing how to deal with the rising cost of oil.
India, the world’s third largest oil importer and consumer, indicated last Tuesday that higher crude prices would accelerate the transition to alternative energy sources.
Energy ministers from OPEC members Iraq, Nigeria and the United Arab Emirates have said in recent weeks that the group sees no need to take extraordinary measures to change the current agreement.