By Tsvetana Paraskova – Aug 03, 2022 7:49 am CDT
- OPEC+ agreed to a small production increase of 100,000 barrels per day for September.
- The OPEC+ Ministerial Meeting accepted the recommendation of the Joint Ministerial Monitoring Committee.
- Saudi Arabia and the UAE are believed to be the only two producers in OPEC+ and the world that currently have enough spare capacity to increase their oil production.
The OPEC+ group gave the green light to raise its oil production targets for September by 100,000 barrels per day, as recommended by the Joint Ministerial Monitoring Committee (JMMC), which met earlier today, Amena Bakr, Chief Correspondent reported of OPEC and deputy chief of the Bureau of Energy Intelligence just as the OPEC+ ministerial meeting began on Wednesday.
Today’s OPEC+ meeting is the first meeting since the group decided to end by the end of August all cuts since May 2020, when the current agreement began.
Analysts had expected the alliance to approve either flat targets for September compared to August or a slight increase.
Ahead of Wednesday’s meeting, the U.S. State Department on Tuesday approved a possible foreign military sale to Saudi Arabia — OPEC’s largest producer — of PATRIOT MIM-104E guidance-enhanced (GEM-T) tactical ballistic missiles and related equipment for an estimated cost of $3.05 billion. The State Department also cleared a possible foreign military sale to the United Arab Emirates (UAE) at an estimated cost of $2.245 billion.
Saudi Arabia and the UAE are believed to be the only two producers in OPEC+ and the world that currently have enough spare capacity to increase their oil production. A 100,000 bpd increase for the entire group would likely mean an increase of less than 30,000 bpd for Saudi Arabia and less than 10,000 bpd for the UAE.
Earlier this week, a Fox Business correspondent reported that Saudi Arabia plans to push for more oil production at Wednesday’s OPEC+ meeting. Fox Business White House correspondent Edward Lawrence cited an unnamed source as saying Saudi Arabia’s King Salman made the assurance to US President Joe Biden during their July 16 meeting in the kingdom.
Higher oil production was one of the reasons for President Biden’s visit to the Kingdom last month, although the White House refrained from stating it openly.
Oil prices jumped after the announcement.
By Tsvetana Paraskova for Oilprice.com
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