fbpx
White House ‘Social Media Summit’: No Facebook, No Twitter, No Transparency CopyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more

Oil up as OPEC+ production decision boosts market confidence

show caption
AFP Photo
Print Friendly and PDF

Dec 03, 2021 - 11:36 AM

ANKARA (AA) – Oil prices rose on Friday supported by greater market confidence from the decision at the OPEC+ meeting of major producers who vowed to intervene to help the market “if required”.

International benchmark Brent crude was trading at $70.88 per barrel at 0619 GMT for a 1.73% increase after closing the previous session at $69.67 a barrel.

American benchmark West Texas Intermediate (WTI) was at $67.73 per barrel at the same time for a 1.84% gain after trade ended at $66.50 a barrel in the previous session.

The world’s major oil producers met on Thursday to discuss their production volume for January. Amid many concerns caused by the new COVID-19 variant, omicron, and the US-led international initiative to sell oil from Strategic Petroleum Reserves (SPR) to reduce high energy prices, OPEC+ producers chose to extend the existing deal to incrementally increase production cuts.

The 23-member group said they would raise production by 400,000 barrels per day (bpd) in January, however, they did not rule out holding urgent meetings to review their policy depending on pandemic developments.

With a promise of ongoing market monitoring and the group’s commitment to “make immediate adjustments if required,” until their next meeting on Jan. 4, investors were more reassured that the market is under control.

In July, major producing countries had agreed to raise output incrementally by 400,000 bpd from August to December and extend the production cut agreement from April 2022 to December 2022.

Under demand pressure since the emergence of omicron last week, oil prices posted their sharpest decline since April 2020.

Several countries have imposed travel bans on South Africa, where the variant first emerged, and other southern African countries, including Namibia, Lesotho, Botswana, Eswatini, Malawi, Zimbabwe, and Mozambique.

The WHO Director-General Tedros Ghebreyesus said Wednesday that at least 23 countries from five of six WHO regions have now reported cases of the new omicron variant, with numbers only expected to grow.

The decision to keep production increase volumes unchanged came despite pressures from US President Joe Biden who repeatedly asked OPEC+ to increase its output to help alleviate high energy prices. The group, however, refused to give in to his demands and agreed to stick to its 400,000 bpd production deal in December.

Biden then announced the decision of oil sales from its SPR to reduce rising oil prices and called on some major oil-consuming countries to follow suit.

Countries including China, India, Japan, South Korea, and the UK said they would join the US-led international force.

The US Department of Energy will release 50 million barrels of oil from the SPR, the largest petroleum stockpile in the world used for emergencies. The combined reserve sales from all countries so far are estimated at around 71.5 million barrels.

  • bio
  • twitter
  • facebook
  • latest posts

LMBCBUSINESS.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.