Does OPEC snub Biden?
OPEC +, which brings together many of the major oil exporters, does not increase the supply of barrels on the market despite pressure from the Biden administration. The US fears that high gasoline prices are fueling inflation. All the details
Today, oil prices have risen by about 1 percent after OPEC +, the group that encompasses many of the world's largest exporters, rejected U.S. calls for increased production, instead deciding to keep the oil prices. current and moderate levels of output.
THE PRICES OF OIL
Brent crude, the international benchmark contract, rose 0.9 percent to $ 81.2 a barrel. The West Texas Intermediate, on the other hand, the benchmark for the American market, grew by 1 percent to $ 79.5 a barrel.
Both contracts had lost about 2 percent yesterday, Thursday. The decline – which came after oil peaked in seven years – is mainly due to rising inventory levels in the United States and the fact that high crude oil prices are encouraging increased supply from outside countries. at OPEC +.
THE OPEC + DECISION
Also on Thursday, OPEC + decided to continue to follow its oil output plan, introduced to balance the market after the collapse in energy demand caused by the pandemic and gradually eased, but always in moderation. The group, therefore, will proceed in December with the expected increase of 400 thousand barrels per day. And it will continue at this pace – or, at least, these are the terms of the deal – until September next year.
OPEC + IGNORES BIDEN
OPEC +, led by Saudi Arabia and Russia, has therefore decided to ignore requests for increased supply from the United States, where Joe Biden's administration is concerned about the increase in the cost of domestic fuels. of a general picture of inflation growth. Gasoline is close to $ 4 a gallon, a threshold considered critical due to the negative effects on transport and consumption.
The pressure of the Biden administration on OPEC to increase the supply of barrels is not new , and is motivated by the reasons just seen. The group, however, has not yet succumbed to Washington's requests and says it has no intention of changing output levels, because the world has not yet emerged from the coronavirus pandemic and new waves of infections could bring down the demand for fuel again.
The next OPEC + meeting is scheduled for December 2.
WHAT BIDEN WILL DO
The White House has accused OPEC + of jeopardizing the global economic recovery and has made it known that the United States is ready to use "all the tools" necessary to lower fuel costs. Over the past twelve months, the prices of petroleum products in America have risen by 60 percent.
Among the "tools" that the Biden administration could use is the release of a part of the barrels of oil contained in the national strategic reserve: the Secretary of Energy Jennifer Granholm told the Financial Times .
According to Christyan Malek, an analyst at JPMorgan, Saudi Arabia needs funds to finance the national transition to new sources of clean energy (the country is extremely dependent on oil revenues at the moment). For this reason, Riyadh has no interest in lowering the prices of crude oil too much, which guarantees him valuable income.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/opec-biden-offerta-petrolio/ on Fri, 05 Nov 2021 08:31:57 +0000.