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The producers are still in their thirteen, drowning the supply

Following the last monthly meeting between the Organization of Petroleum Exporting Countries and its Russian-led partners (which together form the so-called OPEC +), tensions rise by the rate of liquid gold production. Consequently, also barrel prices increase, which are already located around $ 81.5.

Despite the context of global economic crisis and to the requests of great powers such as the US, OPEC + has ratified its roadmap established last July: to continue increasing production at a rate of 400,000 barrels daily every month.

Insufficient production for high demand

Petroleo2

Oil demand continues to accelerate at a much higher rate than could be expected a few months ago, but OPEC turns a deaf ear to requests to move up one more gear to balance supply and demand and has decided that it will continue to increase production at a rate 400,000 barrels per day each month, a clearly insufficient rhythm.

At the last G-20 summit, Joe Biden publicly asked the cartel to raise the current rate of production “so that citizens have gasoline to be able to go to and from work.”

In addition, according to information from the Bloomberg agency, The US would have already asked OPEC to increase oil production until it was between 600,000 and 800,000 barrels per day to adjust prices and secure global supply.

Failing that, if the increase in production did not exceed 400,000 barrels per day, the White House asked the cartel that members who could commit to supplement or offset an increase in supply with respect to other OPEC + member countries that were not managing to meet their production commitments.

Dispensers

Other countries like Japan or India They would also have asked producers to increase the pace, but for the moment, all the requests have fallen on deaf ears as barrel prices remain exorbitant.

And it is that Brent crude has risen up to 62% this year, to almost 84 dollars a barrel, after the obstacles caused in the global economy by the coronavirus pandemic and the OPEC + supply cuts, which began to early last year to adjust to low demand.

Currently, OPEC production exceeds 27 million barrels per day after falling to 22.6 million in June 2020.

After knowing the results of the last meeting, prices reacted with a 3% rise and settled on their highest level since November 2014.

Soon after they stabilized around $ 81.5 a barrel. Specifically, the price of a barrel of Brent crude (reference for Europe), remained above $ 82 with an increase of 0.78%, while WTI crude (reference for the United States), traded above the 81 dollars, with a revaluation of 0.35% in the session.

These figures end up being reflected in the price we pay when filling the tank made out of fuel.

At the moment, already the gates of winter, we will have to wait to find out if the oil cartel decide or not to increase production after holding their next meeting, scheduled for early December.

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Lenny Li

I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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