Thursday, July 1st, 2021
Opec deliberations postponed
Oil-producing countries cannot agree
At the beginning of the Corona crisis, the demand for oil collapses and the production volume is reduced accordingly. In the meantime the tide has turned and the oil price is skyrocketing. But the OPEC states and their partners cannot agree on an expansion of the production volumes.
The most important oil-producing countries have not been able to agree on an increase in oil production against the background of increasing demand for the raw material and growing concerns about inflation. The OPEC states and their partner countries postponed their video conference meeting until Friday, according to a statement. Analysts had previously expected a slight increase in production in August.
Most recently, India, among others, urged the oil-producing countries to expand in order to dampen the price increase. Opec + countries cut crude oil production after the pandemic plunged oil prices last year.
The Organization of Petroleum Exporting Countries (OPEC) includes Saudi Arabia – the world’s second largest oil producer after the USA -, Iraq, Iran, the United Arab Emirates, Kuwait and Nigeria. The partner countries include Russia, Kazakhstan and Mexico. Together the group is referred to as Opec +.
At the beginning of the Corona crisis, in view of the drastic slump in demand, which caused the oil price to drop to its lowest level in decades during the pandemic, the producing countries agreed on a significant reduction in production.
Oil price at its highest level since 2018
In the meantime, however, the signs have changed. Before the start of the deliberations of the producing countries, the oil price for a barrel (159 liters) of the North Sea variety Brent was a good 75 dollars (around 63 euros), a barrel of the US variety WTI cost almost as much in New York this Thursday, which is the highest Status since October 2018 meant.
In Germany, among other things, this has had an impact on the noticeable rise in inflation since the beginning of the year, which is primarily the result of higher energy costs. As the automobile club ADAC announced, the prices for refueling continued to rise in June and have thus risen continuously since the beginning of the year.
In December, Opec + decided to increase the daily production volume by 500,000 barrels in January and a further slight increase in February and March at the beginning of the year. In April, the producing countries kept production largely constant – especially with reference to further uncertainty in the economic recovery from the pandemic. For the months of May, June and July a further increase in the production volume was determined.
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