Alliance members change the approach – instead of protecting oil prices, they move on to market maintenance.
Countries of the Oil Export Countries (OPEC+) are discussing the rising oil production of 500 thousand barrels per day in August, which will probably roll up prices on the market. On Friday, July 4, Bloomberg reported that there was a reference to participants at the Alliance meeting, which should take place online on Saturday.
It was noted that Saudi Arabia began an increase in production in the OPEC+ framework of 411 thousand barrels per day in the last three months. Currently, team members are discussing the possibility of further increase in production in August.
This active approach gives the team to restore market sharing with competitors outside of OPEC+ and is realized despite the risk of global market overpopulation, which could perform additional pressure on prices.
The recent collapse of oil prices has been useful for US president Donald Trump, considering reducing energy as a tool to reduce costs for consumers affected by inflation.
According to one of the delegates, eight major participating countries of the organization will consider the increase in production of more than 500 thousand barrels per day. Another delegate noted that it would allow the return of 2.2 million barrels per day to stop making September – before it was planned.
On Friday, Brent Oil Futures exchanged about $ 68 per barrel in London, which was 13% less than two weeks ago. The move of Israel and Iran from the armed conflict to an unstable Truce hardly affect the export of energy from the Middle East.
“Because OPEC+ has passed from a price protection strategy to maintain a share of the market, holding a nominal voluntary reduction of production is losing its meaning,” said Harry Chinkyryan, head of the analytical unit of the Onyx Capital Group.
According to him, it is advisable to complete the process faster and move on.
Remember that in June, OPEC countries increased oil production by 270 thousand barrels per day due to Saudi Arabia and the UAE.
Russian Federation’s oil revenues fell 30%
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.