The Joint Ministerial Monitoring Committee of OPEC recommends increasing production by 648,000 barrels per day – higher than originally agreed, according to tweets from Amena Bakr, OPEC’s chief correspondent at Energy Intelligence.
The proposed increase in production of 648,000 barrels per day will be in July, and another increase of 648,000 bpd in August. All JMMC members reportedly agreed.
According to the proposal, OPEC + will bring out the planned increase for September and distribute it in July and August, which will lead to an increase of 648,000 barrels per day in each of these months. Then there would be no planned rise in September.
Until Thursday, widespread sentiment was that the OPEC JMMC would support the 423,000-barrel-a-day increase in production already set out in the agreement. But reports from the Wall Street Journal began to filter out that OPEC was considering excluding Russia from the agreement. These reports later turned into rumors that OPEC may agree to increase production to compensate for Russia’s lost oil production as a result of Western sanctions, including the EU’s ban on oil imports from Russia, which was agreed under -early during the week.
According to Amena Bakr, the proposal for an increase of 648,000 barrels per day was discussed as a total increase for the OPEC + group, to be divided equally among its members. However, in reality, there are many OPEC + members who are unable to meet their current quotas and are unlikely to meet a new, even higher, quota.
However, such an increase would allow Saudi Arabia, the UAE and Iraq – all of which are believed to have excess reserve capacity for oil production – the ability to increase production.
If approved by OPEC + ministers, it will come as a relief to the White House, which is asking OPEC – especially Saudi Arabia – for additional oil production as the United States continues to struggle with high gasoline prices in early by-elections.
Oil prices fell on Thursday morning due to the prospect of additional oil coming from the group.
By Julian Geiger for Oilprice.com
More popular readings from Oilprice.com:
Add Comment