2023-07-04 09:51:39
OPEC and Aramco are preparing for future production cuts, when Asian demand growth weakens, with the aim of raising oil prices, but they know that the United States and its main allies in the West and East want the opposite.
According to a report published byOil PriceSaudi Arabia is paving the way for significant cuts in OPEC production. And Saudi Arabia announced, on Monday, that it is extending its voluntary production cut of one million barrels per day until August.
And the Saudi Ministry of Energy said that it would extend the oil production cuts in July, amounting to one million barrels per day, to August, to enhance “stability and balance in the oil markets.”
Saudi Arabia and Russia plan to reduce the amount of oil they pump to the world, in an effort to boost prices, which shows how two of the world’s major oil producers are scrambling to increase income from fossil fuels, despite weak demand, according to the Associated Press.
And OPEC confirmed last week that the continuation of strong economic growth in Asia would be reflected in the growth in oil demand this year. Saudi Aramco added that China and India will drive oil demand growth by more than two million barrels per day in this period.
Just prior to these two comments, Saudi Energy Minister Prince Abdulaziz bin Salman said that OPEC and its allies are in a “state of readiness” amid divergence between the actual and future oil markets. He added that these measures will be “precautionary.” […] An integral part of what we call proactive and preventive measures.
Observers believe that Saudi Arabia, which actually leads OPEC, is paving the way for more significant cuts in oil production with the aim of raising prices.
The decision gave a slight boost to oil prices, Monday, and comes following Riyadh announced a significant production cut, for the month of July, during the last meeting of the “OPEC Plus alliance”, which raised fears that gasoline prices in the United States may start to rise, according to Archyde.com. For the Associated Press.
This keeps the Gulf country’s oil production at 9 million barrels per day.
And by predicting that global oil demand will be driven by China, India and other countries in Asia, Aramco and OPEC are paving the way for future supportive oil price cuts when this expected demand is not appropriate, according to Oil Price.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said that his country will reduce its oil production by an additional 500,000 barrels per day in August, according to Russian news reports.
The voluntary cuts come on top of previous cuts, which the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and allied producers led by Russia agreed to extend until next year.
Oil prices fell 1 percent on Monday, following concerns regarding a global economic slowdown and the possibility of raising US interest rates outweighed the decision of Saudi Arabia and Russia to further reduce their production in August, according to Archyde.com.
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