Despite the recent rally in oil prices, the OPEC+ group is expected to keep next week its current schedule of easing the collective oil production cuts by 400,000 barrels per day (bpd) in November, sources told Reuters on Wednesday.
Brent Crude prices hit $80 per barrel early on Tuesday—the highest level in three years, as the global natural gas shortage and price spikes spilled over into the crude oil futures market.
Oil prices eased at Tuesday closing, also depressed by an unexpected crude inventory build in the U.S. stockpiles last week, as per estimates from the American Petroleum Institute (API).
Oil at $80, however, is making the market and economies jittery over the energy and crude import costs at a time when other energy commodities such as natural gas and coal rally to record highs in major energy-consuming regions.
The pressure on OPEC+ to do more than the planned monthly supply increase of 400,000 bpd started with the oil and energy price rally at the end of last week and continued earlier this week when Brent hit $80.
Major consumers and importers of crude, including China and India, have shown in the past that the $80-a-barrel mark could be a red line beyond which demand destruction begins.
Despite the higher oil prices in recent days, OPEC+ is set to proceed with the planned 400,000-bpd supply boost in November when its members meet for the regular monthly meeting on October 4, according to Reuters’ sources.
“So far we will keep the plan to increase by 400,000 bpd,” one of those sources told Reuters.
As oil was reaching the $80 mark on Tuesday, White House Press Secretary Jen Psaki said that the Biden Administration continues to speak with OPEC about the importance of doing more so that oil prices support the economy.
“We continue to speak to international partners, including OPEC, on the importance of competitive markets and setting prices and doing more to support the recovery,” Psaki told reporters, when asked whether there are any conversations or plans for such with OPEC.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- OPEC+ Will Be Unwilling And Unable To Stop The Oil Price Rally
- The Energy Crisis Is Sending Oil, Gas, And Coal Prices Soaring
- OPEC Sees Global Oil Demand Growing Until 2035