OPEC and a group of non-OPEC led by Russia are discussing to increase the oil production by 5,00,000 barrels per day. OPEC and its allies reduced its oil output in August as Iranian oil supply falls amid the threat of US sanctions, as reported by Reuters.
Oil producers are holding talks in Algeria this weekend. Amid the calls from US president to lower the Oil price and to lower the Iranian oil export to zero by November 4.
Olivier Jakob from consultancy Petromatrix said, “If an increase in production is proposed there will be plenty of market counter-argument that it reduces even further the available spare capacity”.
He said, “Saudi Arabia has made the mistake of trying to compensate for the loss of Iranian supplies with just-in-time replacement; but the oil market is looking for greater supply security than that. As a result, the strength of oil prices is now putting oil demand growth at risk”.
#OPEC and its allies are scheduled to gather in Algeria on Sunday to discuss how to allocate higher supply to offset the shortage of Iranian supplies, however the meeting is unlikely to change production policyhttps://t.co/8BuJdtQ0s8
— Business Standard (@bsindia) September 21, 2018
OPEC and non OPEC allies decided in late 2016 to reduce the oil supply by 1.8 million barrels per day in order to reverse the falling oil prices. The fall in oil prices started since 2014 and came down upto $35 barrel per day, but now have crossed $75 per barrel.
Oman’s oil minister Mohammed bin Hamad Al-Rumhy told on Saturday that, OPEC and non-OPEC producers achieved the pledged output cut by 600,000 barrels per day in August keeping the reduction around 2.4 million barrels per day.
Trump has demanded OPEC to bring down the oil prices, He tweeted, “We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!”