• Email Us: [email protected]
  • Contact Us: +1 718 874 1545
  • Skip to main content
  • Skip to primary sidebar

Medical Market Report

  • Home
  • All Reports
  • About Us
  • Contact Us

OPEC+ caution and money behind reluctance to pump more oil-sources

October 7, 2021 by David Barret Leave a Comment

October 7, 2021

By Alex Lawler, Ahmad Ghaddar and Olesya Astakhova

LONDON/MOSCOW (Reuters) -OPEC+’s decision on Monday to stick with a plan to raise oil output modestly and gradually, despite prices surging to multi-year highs, was partly driven by concern that demand and prices could weaken, sources close to the group told Reuters.

The other big reason is money. After seeing their income slide during the pandemic-induced demand and price collapse in 2020, the OPEC+ oil producers’ alliance led by Russia and top exporter Saudi Arabia are enjoying the boost in revenues, three OPEC+ sources said.

OPEC+ brought in record production cuts of about 10 million barrels per day (bpd) in April 2020, or about 10% of global output, after restrictions around the world to curb the spread of the coronavirus paralysed oil demand and hit prices hard.

“Everyone is happy,” an OPEC+ delegate said of the current oil price level, declining to be identified by name.

OPEC+ has faced calls this year from consumers, such as the United States and India, for extra supply. The group, sources said, was considering a larger boost of 800,000 bpd – almost 1% of world output, ahead of Monday’s meeting.

But by Monday morning, the signals from OPEC+ sources ahead of their virtual meeting later that day had changed. The most likely outcome was that OPEC+ would stick to the existing plan to hike output by 400,000 bpd.

“Based on past lessons, OPEC is more cautious because any hasty decision can lead to a sharp drop in oil prices,” said an OPEC+ source, explaining the reasons not to increase output further.

“So the political pressure of the United States and others has not yet been effective in changing this strategy.”

OPEC+ is mindful, sources say, of the prospect that prices can reverse gains just as quickly. This happened in 2018 when Brent crude fell from above $85 in October to below $50 by the end of the year.

“The oil market is still fragile and there is no guarantee of stable prices,” the OPEC+ source said.

COVID CONCERN

Another OPEC+ source had said before Monday’s meeting the group had faced pressure to ramp up production faster, but added: “We are scared of the fourth wave of corona, no one wants to make any big moves.”

Concern was also expressed by some members of the group that a further boost in output could upset next year’s market balance – which OPEC+ already sees as surplus – and risk building up inventories to above the five-year average in the second half, another source said.

Oil rose above $81 on Monday after OPEC+ stuck with its plan, and has surged even higher in the aftermath of the decision, reaching almost $84 on Wednesday.

The extra income for OPEC members will help to ease the pain of last year’s price plunge. OPEC earned $321 billion in 2020 from petroleum exports, down 43% from 2019, based on OPEC’s Annual Statistical Bulletin.

“For us Iraqis, with a 40 million population and we depend on oil for 85% of our revenue, we hope it reaches $120!,” Iraq’s oil minister Ihsan Abdul Jabbar joked at the Energy Intelligence Forum on Wednesday, before saying that $75-$80 was a fair price for consumers and producers.

(Reporting by Alex Lawler and Ahmad Ghaddar in London and Olesya Astakhova in Moscow; Editing by Jane Merriman)

Source Link OPEC+ caution and money behind reluctance to pump more oil-sources

David Barret
David Barret

Related posts:

  1. TrueFort snares $30M Series B to expand zero trust application security solution
  2. Facebook questions British watchdog’s authority to order Giphy sale
  3. S.Africa’s Zuma seeks to replace prosecutor in arms trial
  4. Leak shows Facebook’s business model needs regulating, says MEP

Filed Under: News

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • New Nimbus COVID Variant Present In The UK, Infections Could Spread This Summer
  • Scientists Have Finally Measured How Fast Quantum Entanglement Happens
  • Why Earth’s Magnetic Pole Reversals Are So Fascinating
  • World First Artificial Solar Eclipse Created, The “Closest Thing” To HIV Vaccine Gets FDA Approval, And Much More This Week
  • “Remarkable” Pattern Discovered Behind Prime Numbers, Math’s Most Unpredictable Objects
  • People Are Only Just Learning What The World’s Most Expensive Cheese Is Made Of
  • The Physics Behind Iron: Why It’s The Most Stable Element
  • What Is The Reason Some People Keep Waking Up At 3am Every Night?
  • Michigan Bear Finally Free After 2 Years With Plastic Lid Stuck Around Its Neck
  • Pangolins, The World’s Most Trafficked Mammal, May Soon Get Federal Protection In The US
  • Sharks Have No Bones, So How Do They Get So Big?
  • 2025 Is Shaping Up To Be A Whirlwind Year For Tornadoes In The US
  • Unexpected Nova Just Appeared In The Night Sky – And You Can See It With The Naked Eye
  • Watch As Maori Octopus Decides Eating A Ray Is A Good Idea
  • There Is Life Hiding In The Earth’s Deep Biosphere, But Not As You Know It
  • Two Sandhill Cranes Have Adopted A Canada Gosling, And It’s Ridiculously Adorable
  • Hybrid Pythons Are Taking Over The Florida Everglades With “Hybrid Vigor”
  • Mysterious, Powerful Radio Pulse Traced Back To NASA Satellite That’s Been Dead Since 1967
  • This Is The Best (And Worst) Sleep Position
  • Artificial Eclipse, Dancing Dinosaurs, And 50 Years Of “JAWS”
  • Business
  • Health
  • News
  • Science
  • Technology
  • +1 718 874 1545
  • +91 78878 22626
  • [email protected]
Office Address
Prudour Pvt. Ltd. 420 Lexington Avenue Suite 300 New York City, NY 10170.

Powered by Prudour Network

Copyrights © 2025 · Medical Market Report. All Rights Reserved.

Go to mobile version