OPEC and Russia will pump more oil in January despite price plunge
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, attends the COP26 climate summit in Glasgow in November.
London (CNN Business)Saudi Arabia, Russia and other leading oil producers have decided to stick with plans to increase supply in January despite a recent plunge in prices driven by fears of a new glut.
The agreement was reached Thursday at a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and key allies, known as OPEC+. Global oil prices have fallen more than 20% since late October.
Brent crude futures, the global benchmark, had soared about 70% since the beginning of the year, but began falling in November when the United States and other major oil consuming nations agreed to release millions of barrels from their strategic reserves to try to cool gasoline prices and prevent a further boost to inflation.
The losses accelerated as Covid-19 cases surged in Europe and the Omicron variant emerged as a potential new threat to economic activity.
In its statement, OPEC+ said it would continue to take stock of the pandemic, monitor the oil market closely, and stood ready to make “immediate adjustments if required.” It has scheduled its next meeting for January 4.
Analysts had been expecting OPEC+ to pause an output increase of 400,000 barrels per day scheduled for January given the recent price fall and uncertainty over the trajectory of the pandemic and its impact on oil demand. Brent crude and US oil futures, which were trading higher earlier Thursday, turned negative on the announcement before recovering to trade about 1% higher at around $69 and $66 a barrel respectively…
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