By next month, the (OPEC) and its allies led by Russia, the group known as OPEC +, will have completely ended the production cuts carried out since the Covid-19 pandemic in 2020.
Oil prices rose in 2020 to their highest levels since 2008, and exceeded $139 a barrel last March following the United States and Europe imposed sanctions on Russia due to its invasion of Ukraine, and prices have since fallen to regarding $108 in light of growing fears that sharp inflation will rise. An increase in interest rates will cause a recession that will weaken demand.
Two of the 8 sources in OPEC + said: “A slight increase in production for next September will be discussed at the meeting that will be held on the third of August, while five sources expected that production will likely remain stable.” Sources “There are many conversations that range from slightly increasing to maintaining current levels.”
Failure to increase production will frustrate the United States, whose President Joe Biden visited Saudi Arabia this month in the hope of concluding an agreement on oil production, and a senior official in the US administration said today, Thursday, that pumping more supplies will help stabilize the market, but given the decline in oil prices since the peak March this year, some in OPEC+ don’t think a further increase in production is warranted.
Another source in OPEC + said, “I expect no increase in production in next September,” adding that the meeting will not likely discuss production quantities beyond next September, and any additional production increase from OPEC + will likely not meet the levels that will be Pledge given that many producing countries are already facing difficulties in meeting target production levels following declining investments in oil fields.