OPEC+ countries decided to increase oil production by 548 thousand barrels a day in August.
Reuters writes that the decision was made at the first meeting of countries -export after tension in the Middle East. OPEC+ called the stable prospects of the global economy and healthy fundamental market indicators, including low oil reserves, as the reasons for the increase in production.
An increase in August means a sharp leap compared to a monthly increase by 411 thousand barrels per day, which OPEC+ approved in May, June and July, and 138 thousand barrels a day in April.
On May 31, OPEC+ ministers agreed to additionally increase oil production by 411 thousand barrels a day since June, the organization reports. A similar increase in the supply of OPEC+ occurred in May and was planned in June. Thus, after three months, the cartel, which unites three dozen of the largest oil countries, will add 1.2 million barrels of new daily deliveries to the market.
At the OPEC+ meeting, there was a dispute between two key participants in the organization – Saudi Arabia and Russia. According to Bloomberg sources, the Russian delegation opposed an increase in production, which could even destroy oil prices and promises the Kremlin problems with the budget.
But Saudi America decided because they want to fulfill the request of the Donald Trump administration, which publicly demanded lower oil prices, sources said.
It is possible that the global oil market is on the verge of a new “price war”, according to analyst Inga Warren Patterson. According to Saudi Arabia, OPEC+ should increase production by 2.2 million barrels per day.
Source: Racurs
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