OPEC Basket Increases to $44.02 Per Barrel

By Adedapo Adesanya

The price of the Organisation of the Petroleum Exporting Countries (OPEC) basket of crudes rose by $1 to $44.02 per barrel on Monday, August 3.

According to calculations by the OPEC Secretariat released on Tuesday, the weighted average of 13 crudes rose by 2.3 per cent from $43.02 the previous day.

The rise can be attributed to positive data from the United States, Europe, and Asia which supported trading sentiments.

In the United States, manufacturing activity accelerated to its highest level in nearly one and half years in July as orders increased despite a resurgence in new infections, according to the Institute for Supply Management (IMS).

Also, manufacturing activity across the eurozone expanded for the first time since early 2019, as demand recovered following months of coronavirus-induced lockdown measures. A survey showed that it came in at 55.3 index points, surpassing expectations and rising from 48.9 points in June.

While in China, its manufacturing activity expanded by more than expected in July, while most indexes in the Asian region slid into the red.

The OPEC Reference Basket of Crudes is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

In other OPEC related news, there was an increase in the production output by 900,000 barrels a day to 23.43 million a day in July as Persian Gulf members phased out extra supply cutbacks.

Saudi Arabia, the United Arab Emirates (UAE) and Kuwait restored the additional output taken offline in June when they had amplified efforts to stop an oil glut left behind during the coronavirus crisis.

As oil consumption recovers with the restart of economic activity worldwide, OPEC+ will return 1.3 million to 1.5 million barrels a day to the market this month, according to Saudi Arabia, following the tapering of record cuts.

However, laggards like Iraq and Nigeria made no progress in implementing their promised supply cutbacks, let alone the additional curbs they had pledged in compensation for earlier non-compliance.

Business Post also understands that Russia, the biggest non-OPEC member in the OPEC+ alliance, also increased production in July.