OPEC+ countries decided not to accelerate the increase in oil production

An online meeting of OPEC+ energy ministers on October 4 was supposed to determine the immediate future of the oil market in the context of a growing energy crisis. But the countries have kept the current parameters of the deal.

What's happened

Today, the OPEC+ countries decided to maintain the current parameters of their oil deal and increase production in November by 400,000 barrels per day. According to the deal, Russia and Saudi Arabia in November will be able to increase production to 9.913 million barrels per day, Iraq - up to 4.193 million, the United Arab Emirates - up to 2.855 million, Kuwait - up to 2.532 million.

Analysts had previously predicted this. Despite the fact that oil quotes remain at three-year highs at $80, and traders and investment banks are confidently predicting $90 in the near term, sources close to the meeting said that OPEC + ministers would not increase the pace of production recovery.

Against the backdrop of the news about the preservation of the OPEC + deal, the growth of oil prices accelerated sharply. The price of Brent added about 3% during trading and approached $82 per barrel for the first time since October 2018

What did you expect from the meeting?

Bloomberg points out that prices in the range of $ 70-80 suit all producing countries, including OPEC leader Saudi Arabia and Russia, which has found a common language with the Saudis. Washington is also satisfied with the current rate of increase in quotas, the agency quoted an unnamed US administration official as saying.

Reuters writes that his sources were waiting for a simple extension of the deal, despite consumer pressure. However, “oil at $100” will be a strong incentive to increase production in order to prevent market volatility, which is currently controlled by OPEC +.

The OPEC+ forecast prepared for the meeting stated ) that oil demand in 2022 would increase by 4.2 million b/d to 100.8 million b/d (+0.9 million b/d to the previous estimate . But the supply of oil will still increase, and instead of the current deficit of 1.1 million b/d, a supply surplus of 1.4 million b/d is expected already in 2022.

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The Bell talked about the reasons for the rise in oil and gas prices and the prospects for a European energy crisis. In the last 24 hours, spot gas in Europe has risen in price to $1,200 per thousand cubic meters, remaining twice as expensive as its oil equivalent.