OPEC and Russia meet to adjust the level of their crude oil pumping

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This content was published on May 05, 2022 – 08:37

Vienna, May 5 (EFE) .- OPEC +, led by Saudi Arabia and Russia, decide this Thursday how much oil they will pump in June, in a video conference from which no surprises are expected, but rather to maintain the moderate increase agreed already in July 2021 .

The virtual meeting of ministers from the Organization of Petroleum Exporting Countries and ten independent producers takes place a day after a plan was unveiled for the European Union (EU) to gradually stop buying Russian crude to increase pressure on Moscow. for his invasion of the Ukraine.

The prices of “black gold” have reacted with strong increases to the announcement of the European Commission’s proposal, which still has to be approved by the Twenty-seven and provides exceptions for Hungary and Slovakia due to their high dependence on supplies from Moscow.

The price of a barrel of Brent crude oil ended yesterday’s session in the London market at $110.2, 4.82% more than at the close of Tuesday, while in New York, Texas intermediate oil (WTI) advanced 5.27%, to $107.81.

Despite the tense situation in world energy markets, where high prices are driving inflation, there are no signs that the 23 OPEC+ countries, responsible for around 40% of global crude oil supply, are going to contribute substantial relief as demanded by major consuming nations.

According to analysts, today’s meeting, a regular and monthly meeting, is expected to be similar to the previous ones and the ministers will limit themselves to sanctioning an increase in extractions of 432,000 barrels per day (mbd) as of June 1.

This moderate increase, which would leave the total production cap of 20 countries (all except Venezuela, Iran and Libya) at 42.56 mbd, is already foreseen in the roadmap adopted by the group in July of last year in order to achieve the recovery of the pre-pandemic pumping level.

However, most countries face increasing technical difficulties in reaching the stipulated production ceilings, due to a lack of investment in their industry.

The drop in production capacity that affects almost all the members of the alliance except Saudi Arabia and the United Arab Emirates is one of the reasons why no one expects the alliance to agree to a more significant increase in its supply.

To this is added the loyalty to the cooperation with Moscow that OPEC has defended since 2016 and that has led several representatives of the group to make it clear that they will not compensate for the absence of Russian barrels.

On the other hand, producers see in the new outbreaks of covid in China, on the one hand, and in the rising inflation, on the other, two factors that tend to slow down economic growth, reduce consumption and put downward pressure on prices. “petroprices”. EFE

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