OPEC+ continues to seek to raise oil prices

OPEC+ continues to seek to raise oil prices

Jun 05, 2023

Vienna [Austria], June 5: The Organization of the Petroleum Exporting Countries (OPEC) and its partner, commonly known as the OPEC+ group, are working to lift oil prices, after some members agreed to voluntary production cuts in April but failed to bring them back. long recovery.
Representatives of the members met in Vienna (Austria) from 3 to 6 June to discuss measures to deal with the drop in oil prices and the impending oversupply, according to Reuters. OPEC+ supplies about 40% of the world's crude oil production, so policy decisions can greatly affect oil prices.
Before OPEC+ can make a new decision, sources say the organization is likely to continue cutting up to 1 million bpd. Previously, members in April made a surprise move to cut up to 2 million bpd, in addition to voluntary cuts of 1.6 million bpd, effective May. If the cuts continue, the total production reduction will be 4.66 million bpd, or about 4.5% of global demand. Normally, production cuts take effect in the month immediately following the date of agreement, but members can also agree on later application.
Western countries accuse OPEC of manipulating oil prices and influencing the global economy through high energy costs. The West also accuses OPEC of leaning too much towards Russia despite Western sanctions against Moscow. In response, OPEC insiders and watchers say Western money printing over the past decade has fueled inflation and forced oil-producing nations to act to maintain the value of their main exports. .
The announcement of production cuts in April helped oil prices increase by about 9 USD / barrel to more than 87 USD / barrel, but quickly fell back under pressure related to concerns about global economic growth and demand . oil demand . During the decline, there was a time when the price of Brent crude oil fell to about 70 USD/barrel. On June 2, Brent crude oil price was at $76/barrel.
In addition, it is possible that OPEC+ is considering a baseline in oil production in 2023 and 2024. Last week, Saudi Energy Minister Abdulaziz bin Salman Al Saud said that investors are shorting oil prices. or bets on price cuts should "watch out", interpreted by many as a warning of further production cuts. The International Energy Agency forecasts that world oil demand will increase further in the second half of 2023, potentially helping to boost oil prices again.
Source: ThanhNien Newspaper