On Wednesday, a group of some of the world’s most influential oil producers agreed to a planned increase in output, even though crude prices are near record highs due to geopolitical tensions.
OPEC and its non-OPEC partners, known as OPEC+, quickly agreed to reinstate 400,000 barrels per day in March.
The move, which energy analysts widely anticipated, represents a continuation of the group’s gradually reopening the taps.
The energy alliance, led by OPEC kingpin Saudi Arabia and non-OPEC leader Russia, is unwinding record supply cuts of approximately 10 million barrels per day.
OPEC+ has been under pressure from top consumers such as the United States and India to pump more to lower prices and aid the economic recovery. Despite higher oil prices, the group has resisted calls for faster increases.
The international benchmark is Brent crude futures settled 0.35 percent higher at $89.47 per barrel. Last week, the contract reached a seven-year high of $91.70.
Meanwhile, West Texas Intermediate futures in the United States rose 6 cents to settle at $88.26 per barrel. The contract reached $89.72 during the session, its highest level since October 2014.
OPEC alone accounts for roughly 40% of the world’s oil supply.
According to Helima Croft, head of global commodity strategy at RBC Capital Markets, OPEC+ is likely to stay the course for the time being.
The issue is that they are not producing 400,000 barrels due to problems with Nigeria and Angola.
In recent months, several OPEC members have struggled to meet the group’s monthly output increases.
Croft predicted that if oil prices rose significantly — a move widely anticipated by Wall Street analysts — Saudi Arabia would cap any upside risk due to concerns about dwindling oil demand.
To be sure, the primary cause of the climate emergency is the use of fossil fuels such as oil and gas.
The world’s leading climate scientists have warned that limiting global warming to less than 1.5 degrees Celsius above pre-industrial levels will soon be out of reach unless greenhouse gas emissions reduce immediately, rapidly, and on a large scale.
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