Will Saudi Arabia and Russia rocket oil to hit Biden?

Will Saudi Arabia and Russia rocket oil to hit Biden?

After the release of barrels from the US strategic reserve, the Wall Street Journal writes that Saudi Arabia and Russia could suspend OPEC + oil supply increases. Here's what we know

Yesterday the Wall Street Journal wrote, based on information received from anonymous sources, that Saudi Arabia and Russia are considering suspending the increase in oil supply on the markets.

WHAT OPEC + IS DOING

The news is relevant because Riyadh and Moscow are the two countries that lead OPEC +, the group that brings together some of the largest crude oil exporters in the world and acts as the "arbiter" of the market, exploiting its production weight to balance levels supply and demand (thus influencing fuel prices).

Last year, to offset the collapse in energy demand caused by the pandemic, the organization launched a plan to reduce the supply of oil, which was then gradually eased: the expected increase is now 400,000 barrels a day, every month, until – in theory – September next year.

THE MOVE OF THE UNITED STATES

Some countries – starting with the United States, where high inflation is a political problem for President Joe Biden – would like OPEC + to put more oil on the markets, so as to lower prices: at the end of October they had exceeded 85. dollars a barrel, and it was thought that it could hit 90 or 100 by the end of the year.

On Wednesday, the United States, along with China, India, Japan, South Korea and the United Kingdom, announced that it will withdraw 50 million barrels of oil from its strategic reserve and put it into circulation on the market. In total, the move is expected to affect 70-80 million barrels, less than analysts expected. The announcement was preceded by rumors and advances in newspapers that helped cool the price of oil, which remains high but below October levels.

WHAT THE EMIRATES THINK

OPEC + will meet on December 2nd to decide on supply levels for the following January. If Russia and Saudi Arabia are thinking of reducing the overall increase in output (thus making it fall below the expected 400,000 barrels per day more), the Wall Street Journal writes that the United Arab Emirates, another influential member of the cartel, they do not consider this slowdown necessary.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/arabia-saudita-russia-pausa-aumento-offerta-petrolio/ on Thu, 25 Nov 2021 09:29:06 +0000.