The Petroleum it is trading higher at this time on Friday (Brent: + 0.62%: $ 76.31; West Texas: + 0.13%, $ 75.33) after the ministers of the OPEC + will delay their meeting to decide on the production, since the United Arab Emirates have disagreed with “the slowness” with which other OPEC members, specifically their preferred partners in Saudi ArabiaThey want to increase oil production in the coming months.
Both Brent and West Texas rose strongly after plans, backed by Saudi Arabia and Russia, for OPEC and its allies to add again. 400,000 barrels per day every month from August to December, which was more cautious than expected by investors.
Prices fell after the plan met resistance from the UAE and OPEC + postponed the meeting to this Friday. Analysts expect a production increase of 550,000 barrels per day.
This would mean returning to the market around 9% of the production still pending return after the pumping cuts decided at the beginning of the pandemic, and which is returning very gradually to the market to keep up with the pace of demand recovery. thus allowing to maintain a stable Brent level around $ 75 per barrel (+ 47% in 2021, + 370% from the 2020 lows), explained from Renta 4.
The decision to increase production gradually is based on the existing risks, both in terms of greater supply (if the nuclear pact is reactivated, Iran’s production would add 1 million barrels a day) as in lower demand (in case of brake on mobility to worsen the pandemic situation due to the new variants), these analysts add.
The intention of the producing countries would be to continue increasing their pumping of crude in the last four months of the year progressively, at the rate of 400,000 barrels per day additional per month, which would total 2 million barrels in the remainder of the year (on the 5.8 million current supply cut compared to pre-pandemic levels), they highlight.
Of not reaching an agreement, supply would remain at current levels until April 2022, with the consequent risk of overheating (crude oil deficit) and additional upward pressure on prices that would question the economic recovery, they conclude.