By Adedapo Adesanya
Crude prices returned to the bullish region after sinking on a volatile trading Thursday due to a reversal as a result of information that Saudi Arabia’s oil output will soon surpass 10 million barrels per day for the first time since the outset of the COVID-19 pandemic.
Consequently, the Brent crude rose by 75 cents or 0.93 per cent to settle at $81.29 after initially falling to $80.54 a barrel, while the United States West Texas Intermediate (WTI) crude returned to $79.72 after first depreciating to $78.81 a barrel.
Saudi-owned Al Arabiya TV reported that the world’s largest oil exporter would see its export hit the pre-COVID levels after the nation, along with other Organisation of the Petroleum Exporting Countries and its allies (OPEC+) agreed to stick to previously agreed-upon production increases.
Saudi Arabia and Russia, the OPEC and non-OPEC groups leaders within OPEC+, respectively, will each have a production ceiling of just over 10 million barrels per day—at 10.018 million barrels per day each.
OPEC+ will roll over its August programme to gradually increase oil production by 400,000 barrels per day each month ignoring pressure from big players like the US to help cool the market.
According to Russian Energy Minister Alexander Novak after the meeting, “The decision was made previously to increase production by 400,000 barrels per day every month, and I underscore every month, until the end of 2022. Today the decision was reiterated to maintain current parameters which were decided on earlier.”
He added that the market was not heeding the requests and complaints from other countries because they were maintaining market balance and remaining wary of potential changes in demand especially due to uncertain elements like COVID-19.
On his part, the Nigerian Minister of State for Petroleum Resources, Mr Timipre Sylva said “OPEC has made it clear that we are not looking at prices, we are looking at supply and demand. And the supply is not enough to react to what is happening in the market. Especially when you compare it to what is happening in the gas market. As a responsible organisation, it is time to just watch the market.”
Oil prices have recently hit their highest levels since 2014, and crude-importing countries have had to face the brunt.
Recently, US President, Mr Joe Biden, blamed the reluctance of the alliance to pump more oil for the sharp rise in energy prices in the US and around the world.
As per the production table provided by OPEC, the producers will have a collective quota of required production of 40.094 million barrels per day in December, of which the 10 OPEC members bound by the pact should pump no more than 24.3 million barrels per day, and the non-OPEC producers led by Russia will have a ceiling of 15.794 million barrels per day.
