July 23, 2024

Oil price recovers, jumps to $84.16, as OPEC+ increases total output cut to 3.66 mb/d

Oredola Adeola

Organization of the Petroleum Exporting Countries (OPEC) and its allies -OPEC+ on have announced an output further, by some 1.16 million barrels per day(mbd) bringing the cartel’s total volume of cut to 3.66 million, translating to 3.7 percent of global demand, this is according to Reuters calculation.


The 1.16mbd cut has immediately shut Brent crude oil price up to $84.16 (8%) after falling to near $70- the lowest in 15 months- on March 20 due to banking industry after a couple of sizeable bank collapses in the United States  and as a halt in exports from Iraq’s Kurdistan region curbs supplies.


This is happening ahead of the OPEC’s Joint Ministerial Monitoring Committee (JMMC) later scheduled for Monday, (today) April 3, 2023.


EnergyDay’s check showed that OPEC+ had during the 33rd OPEC and non-OPEC ministerial meeting on 5 October, announced a reduction in overall production by 2 mbpd, starting from November 2022.


Russia, in February 2023, cut oil production by 500,000 barrels per day, or around 5% of output, and it has also revealed the plan to extend the production cuts until the end of 2023.


The United States Government has criticized the move by the cartel, arguing that the timing of the production cut was wrong.


Spokesperson for the National Security Council said, as quoted by The Hill, said, “We don’t think cuts are advisable at this moment given market uncertainty — and we’ve made that clear.


“But we’re focused on prices for American consumers, not barrels, and prices have come down significantly since last year, more than $1.50 per gallon from their peak last summer,” the spokesperson said.


“OPEC is taking pre-emptive steps in case of any possible demand reduction,” Energy Aspects’ Amrita Sen told Reuters.