Despite Rising Oil Prices, OPEC+ Refuses to Reduce Output
After voting earlier this week to maintain output at current levels, optimistic bets on crude resumed Friday amid predictions that major oil producers will continue to allow prices to rise unabatedly.
January oil futures on the New York Mercantile Exchange surpassed $81 per barrel, while Brent Crude futures finished at $83 per barrel on the London Intercontinental Exchange by more than $2.
Furthermore, dealers must now contend with the likelihood of increased Saudi Arabian output, in addition to rising supply concerns in the United States. The forecast remains positive as a result of the rapid rate of economic recovery and rising global demand.
Recently, US President Joe Biden urged OPEC to pump more oil. After those pleas were denied, Energy Secretary Jennifer Granholm urged oil-producing countries to raise crude supplies immediately so that people are not harmed by high prices this winter.
After OPEC and its allies chose to maintain production, hopes that the United States could tap its strategic petroleum reserves to lower energy costs were immediately dashed, bolstering expectations that oil supplies would remain tight.
On Thursday, OPEC and its partners, including Russia, reaffirmed their intention to gradually increase oil output by 400,000 barrels per day beginning next month.
After the White House was irritated by the unchanged decision, an administration spokeswoman stated that the administration was planning to employ a variety of tools to battle rising oil prices and gas prices.
Baker Hughes Co announced that the number of rigs in the United States increased by six last week to 550, indicating that supply is becoming increasingly scarce.
The supply and demand imbalance will be highlighted in the Energy Information Administration and OPEC’s monthly reports, which will be released next week.
