Brent oil was set to stabilize at its highest level since the start of the epidemic, after Opec և its allies remained committed to their plan to gradually improve the oil boost market.
The international oil index rose nearly 3 percent to $ 71.34 a barrel on Tuesday as Opec + makers, led by Saudi Arabia and Russia, said there was still uncertainty about the epidemic as demand recovered and halted further production.
After a 30-minute virtual meeting, Opec + ministers agreed to continue their plan to release more oil on the market in July. After the increases in May և June, this period will be a total increase of 2 million barrels per day.
Many traders say the use of vaccines և government stimulus measures has boosted demand for oil, leaving the market in a stable deficit, which has boosted crude oil prices by 35% since the end of last year.
Opec + has recognized a announcement: “Continuous strengthening of market bases, showing clear signs of improving oil demand. ,, [oil inventories] “As economic recovery continued in many parts of the world.”
But Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said he did not think inflation was an immediate issue. Instead, he warned that he still saw “clouds on the horizon” for the recovery of the oil market.
“I’m not the right economist to talk to [about inflation], talk to Goldman Sachs. “I hope they will tell you that it has a thorough effect,” Prince Abdulaziz told reporters after the meeting.
The group cited Covid-19 infections growing in Japan և Japan as one of the reasons for their warning. The possible return of oil supplies from Iran, if it concludes a new nuclear deal with the United States, will also give the group grounds to act cautiously.
However, the group’s own analysts estimate that by the end of next month, global oil reserves, which provide the supply shock, will fall below the average level of 2015-2019, giving preference to higher prices, but also the possibility that the group will eventually increase production faster. :
Prince Abulaziz, the half-brother of Crown Prince Mohammed bin Salman’s half-brother, said before the meeting that “the demand picture showed clear signs of improvement and the oil market welcomed additional [Opec+] supplies “from April.
Manufacturers meet every month to decide on oil policy, following a sharp drop in supply in April last year, as demand was tempted during the first blockades outside China.
Last year, Opec և Russia introduced a record reduction of 9.7 mg / day, which they began to gradually deplete as travel resumed և cities reopen for months behind closed doors. From July, the curbs will be below 6 m / day.
“The market is now facing the exact opposite dilemma of April 2020.” “Manufacturers now have an equally delicate task of bringing back enough supply to meet rapidly growing oil demand,” said Louise Dixon of Rystad Energy.
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Tamas Vargan, an analyst at oil brokerage PVM, says the group should be wary of investors’ reactions to rising inflation, as well as the market’s ability to withstand any growth.
“The general concern is that higher prices for producers, consumers will force central banks to reduce their monetary stimulus, and eventually raise interest rates as economies overheat,” Vargan said.
Prince Abdulaziz added that the world’s largest oil-exporting kingdom also paid little attention to the International Energy Agency’s warnings that it was necessary to limit investment in new production if purely zero goals were met, saying it was “La La Hogh”.