OPEC+ oil cartel agrees small output rise
The OPEC+ oil cartel has agreed to a small increase in production Wednesday, raise production by 100,000 barrels per day for September.
Oil prices had fallen earlier this week but they rose more than one percent on news of the OPEC+ decision, with the main international contract, Brent, climbing back above $100 per barrel.
It small increase is likely to be a disappointment for US President Joe Biden who lobbied for a big hike to tame soaring energy prices on a recent trip to Saudi Arabia.
“The smallest increase in OPEC+ history will do little to help the ongoing global energy crisis,” Edward Moya, analyst at OANDA trading platform, said.
“Oil looks like it will still remain stuck around the $100 barrel level even as the global economic slowdown accelerates. The Biden administration will not be happy and this will be a setback in improving US-Saudi relations.”
Biden said after his meetings with Saudi officials that he was “doing all I can” to increase the oil supply.
But OPEC+ includes Russia, putting Saudi Arabia in a tight spot between Washington and Moscow.
After cutting production in 2020 in response to falling prices during the Covid pandemic, OPEC+ agreed to raise its quotas last year as demand rebounded.
OPEC+ began to add around 400,000 barrels per day to the market last year, renewing the policy every month until June. It upped production by almost 650,000 bpd in July and August.
Its output is supposed to have returned to pre-Covid levels after cuts totalling 9.7 million bpd – but only on paper, as some members of the 23-nation group have struggled to meet their quotas.
