OPEC agrees to produce slightly more oil as recession fears loom

The Organization of the Petroleum Exporting Countries and its allies — including Russia — also known as OPEC+, said on Wednesday it would produce an additional 100,000 barrels per day in September.

This was the first OPEC meeting since US President Joe Biden visited Saudi Arabia last month. Biden urged the country, the group’s largest oil producer, to start pumping more.
For months, prices have risen as Western embargoes on Russian oil have limited global supply. Those prices have helped the world’s largest oil companies achieve record profits, even as millions face rising fuel bills.

The price of Brent oil, the global benchmark, also peaked at $139 a barrel in March in the days after Russia invaded Ukraine, but Brent is now trading around $139 a barrel. $100 as traders fear a global recession will hurt demand.

Brent crude and West Texas Intermediate crude – the North American benchmark – both rose almost 2% on Wednesday after OPEC’s announcement, as oil investors expected a bigger increase in production.

Oil inventories ‘critically low’

Still, OPEC expressed concern on Wednesday that global supply will not be able to meet demand after 2023.

It said the emergency oil stocks of the 38 countries belonging to the Organization for Economic Co-operation and Development, including the world’s largest economies, are currently at their lowest level in more than 30 years.

Last month, the International Energy Agency warned in a report that “global oil inventories remain critically low,” posing a particular risk to emerging economies.

OPEC+ has spent months trying to reverse production cuts made during the pandemic as demand for oil collapsed.
In June, the cartel agreed to increase supply to offset a decline in Russian oil trade — that month, the European Union agreed to cut Russian crude imports by 90% by the end of the year. Reduce.
OPEC+ agreed to increase production by 648,000 barrels per day in July and August. But according to a Reuters survey earlier this week, many countries have failed to deliver on their commitments.

On Wednesday, OPEC said the production capacity of many of its members was “seriously limited” due to “chronic underinvestment in the oil sector”.

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