empty
 
 
05.03.2021 12:47 PM
OPEC members to maintain the current volume of oil production

This image is no longer relevant

This image is no longer relevant

OPEC and its members have decided to maintain the current volume of oil production. As a result US crude jumped by more than 5%, hitting nearly $ 65 a barrel.

Saudi Arabia will also resume its additional 1 million bpd production cut, as it said it is in no hurry to resume supplies.

In general, this decision of OPEC is in line with the intention of Saudi Arabia, which is to limit supply in order to maintain or raise prices. However, there are risks on this action, as higher oil prices could stimulate additional drilling by US oil producers.

"It will be difficult," said Bill O'Grady of Confluence Investment Management. "The longer prices go up, the more likely we will see a response from the US supply."

During the meeting, OPEC considered restoring production by as much as 1.5 million barrels a day. However, many members opposed it.

Aside from that, old issues in the oil market remain unresolved. The current cease-fire between rival oil-producing countries is fragile, and the main reason why prices are currently rising is because Saudi Arabia decided to be generous and cut more supply.

In fact, in the earlier meetings, prices have dropped very sharply amid attacks on oil facilities. The situation with COVID-19, as well as the lockdowns put up to combat it, also drastically reduced demand. Now, the key question is: how long is Saudi Arabia willing to pay the price to support the oil market? We are uncertain, but the next meeting of OPEC is scheduled on April 1.

Andrey Shevchenko,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback