Oil prices fall (-0.46% WTI to 65 dollars a barrel, -0.41% Brent to 68.59 dollars) after OPEC and its allies agreed to stick to their current policy of monthly increases in oil production.
Under its existing pact, OPEC + agreed to boost production by 400,000 barrels a day each month, liquidating record cuts agreed in 2020 when demand plummeted due to the pandemic. The Cartel and its allies, known as OPEC +, therefore resisted US calls to increase oil production more rapidly to help the global economy.
Gasoline prices in the United States have skyrocketed and President Joe Biden’s ratings have slipped. Prior to the meeting, some experts reported that market uncertainties had prompted the group to consider the option of pausing the increase expected for January or increasing production by a smaller amount.
Even before concerns about the new Omicron variety emerged, OPEC + had assessed the effects of last week’s announcement by the United States and other countries on the release of emergency crude oil reserves to curb energy prices. Any decision to increase production by less than 400,000 barrels per day in January or even cut supplies would have put the Cartel in full conflict with Washington.
OPEC + has consistently failed to meet its production targets, with around 700,000 barrels per day less than expected in both September and October, according to the International Energy Agency (AIE). (All rights reserved)