OPEC+ choice to drip-feed oil supply sends price to 7-year high
BNN Bloomberg
OPEC+ agreed to maintain its schedule of gradual monthly production increases, triggering a surge in crude prices.
OPEC+ agreed to maintain its schedule of gradual monthly production increases, triggering a surge in crude prices.
Ministers ratified the 400,000 barrel-a-day supply hike scheduled for November after a short video conference on Monday. Going into the talks, there had been speculation that they could opt for a larger supply increase, but no such proposal was made, delegates said, asking not to be named because the meeting was private.
West Texas Intermediate crude jumped as much as 3.3 per cent to US$78.38 a barrel in New York, the highest in almost seven years.
The agreement comes as OPEC+ appears to be very much in control of the oil market. Crude is trading at multiyear highs without prompting a surge in rival supplies. The cartel’s production policy will be the main factor influencing prices in the coming months, according to oil trader Vitol Group.
This means Saudi Arabia is “keen to tweak the current OPEC+ deal of monthly increases as little as possible,” said Amrita Sen, chief oil analyst and co-founder of consultant Energy Aspects.
