Despite the decline, the price level is still 30 percent higher than it was at the beginning of 2021.
Oil-exporting countries Opec and its allies (Opec +) have decided to continue to increase oil production, according to Reuters.
The decision was made despite the fact that the North Sea Brent reference price has fallen from its October highs to around $ 70 a barrel.
As late as October, the price was over $ 86 a barrel, the highest price since October 2018. Despite the decline, however, the price level is still 30 percent higher than it was at the beginning of 2021.
Production there is a risk that oil prices will fall more than targeted. One concern is that the worsening coronavirus situation will increase restrictions and reduce oil consumption, which would further reduce prices.
“We need to monitor the market closely to see the real impact of the omicron variant,” one Opec + spokesman said after the talks, according to Reuters.
According to Reuters sources, Opec member countries also considered at their meeting the possibility that the increase in oil production would have been stopped or at least curbed at the current pace. However, this would have led the organization into disagreements with the U.S. administration.
United States has recently repeatedly put pressure on Opec to accelerate production growth. Under pressure is the rise in gasoline prices in the United States, which threatens to weaken the president Joe Biden support.
Last week, President Biden’s administration announcedthat the United States plans to release 50 million barrels of crude oil from U.S. strategic oil reserves to curb rising fuel prices.
Prior to the current talks, the US Deputy Secretary of Energy David Turk however, the timing of the country ‘s launch could be changed if oil prices fell significantly.
In addition to the United States, China, India and Japan have mobilized their oil stocks to push down crude oil prices.
Opec + plans to meet next to decide on oil production volumes on January 4th.
However, the group stated in its statement that if the market situation so requires, an earlier meeting time is also possible.
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source https://pledgetimes.com/oil-oil-producing-countries-decided-to-continue-to-increase-production-despite-falling-prices/
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