Oil prices rose on Monday as global supply is tightening with lower exports from Saudi Arabia and Russia, offsetting nagging concerns about global demand growth amid high interest rates.
OPEC+ is unlikely to tweak its current oil output policy when a panel meets on Friday, six OPEC+ sources told Reuters, as tighter supplies and resilient demand drive an oil price rally.
A panel of OPEC+ is unlikely to change the current oil production policy of the alliance at the Friday meeting, several sources in the group told Reuters on Wednesday, as prices rallied to more than a three-month high.
Happily for Saudi Arabia, it does not take a genius to work out that persuading its OPEC+ brothers to cut their oil production to ramp up prices and then quietly selling additional oil over and above its official quota is a major money spinner.
For OPEC, it is the best of times and the worst of times – depending on which member you ask. Despite a massive oil price windfall brought on by Russia’s war in Ukraine last year, the OPEC members are reaping massively unequal revenues from a shrinking basket.
Slowing global oil demand growth and dissent over crude production policies could lead to a break-up of the OPEC+ alliance, which would send oil prices tumbling to as low as $35 per barrel, a portfolio manager at investing group Clean Energy Transition said on Thursday.
Opec+ will continue pursuing efforts to stabilise the oil market and will do “whatever is necessary”, Saudi Arabia’s Energy Minister has said.
This Monday saw what was perhaps one of the shortest oil price rallies following an OPEC+ meeting.
Following a suspense-filled weekend in Vienna, where OPEC oil ministers attempted to downplay media attention, global oil markets remain uncertain about the direction of oil prices.
Oil prices are now a lot more likely to rise after OPEC+ extended the cuts into 2024 and Saudi Arabia announced an additional reduction of 1 million bpd for July, Fatih Birol, the Executive Director of the International Energy Agency (IEA), was quoted as saying on Monday.