The member countries of the organization see a stable market in the near future.
The Organization of Petroleum Producing Countries and other allied countries (OPEC +), led by Saudi Arabia and Russia, has decided this Tuesday to continue increasing its pumping and add 400,000 barrels per day of crude oil to its February supply despite the strong expansion of the omicron variant of the coronavirus.
In a videoconference, the ministers of the alliance confirmed “the decision to adjust the monthly global production upwards by 0.4 mbd in the month of February 2022”, according to their final statement, published by the Organization of Petroleum Exporting Countries ( OPEC).
The result of the meeting was as expected in the markets, where the “black gold”, after appreciating near 75% in 2021, remained on the rise today, with a barrel of Brent touching 80 dollars.
Thus, neither OPEC + nor the “petroprices” seem to be concerned about the possible effects of the current virulent wave of the covid pandemic that, driven by the contagious omicron variant, is causing unprecedented numbers of infections so far and disruptions of diverse nature in various regions of the world.
The alliance of oil-producing countries has been confident that the impact of omicron, especially on mobility -and therefore, on the demand for crude oil-, will be “mild and of short duration”, according to an analysis of an internal committee of OPEC +.
The report further highlights that the world has increasingly better tools to “manage COVID-19 and its related challenges.”
Bombeo prepandemia
The increase in oil production certified today is in line with the roadmap agreed by OPEC + last July to gradually recover, until next September, the level of pumping that the group had before the pandemic.
Until now, OPEC + has stuck to this plan of moderate monthly increases of 400,000 bd, in a strategy of caution in the face of the uncertainties facing the energy market, especially due to the pandemic.
This is how the large cut, of 9.7 mbd (close to 10% of world production), applied in May 2020 to compensate for the historic collapse in demand and oil prices that caused the oil crisis, has been reduced. coronavirus.
According to calculations, the barrels that will still remain underground would add about 2.4 mbd in February, when the official cap on joint pumping will rise to 40,898 mbd, of which 24,808 mbd correspond to OPEC (not including pumping from Venezuela, Iran and Libya) and 16,086 mbd to all of the ten independent allied producers.
The quotas of Saudi Arabia (a member of OPEC) and Russia (a non-member), by far the group’s largest producers and exporters, each rise to 10,227 mbd next month.
Market remains stable
Although the result of today’s OPEC + appointment is the same as that of the previous ones since August, this time it began with an unusual act, namely, that of closing the teleconference of early December (number 24), since the ministers then left it “open” in case they had to make an emergency adjustment.
It was not so. The reason why they adopted this unprecedented measure was the uncertainty aroused by omicron, whose appearance was very recent at the time.
Today the meeting closed very quickly, and the ministers opted for a message of tranquility by highlighting, in their final statement, that they made their decision based “on the current fundamentals of the oil market and the consensus on its prospects.”
The group considers the current situation of the oil market “stable”, and even expects a surplus of supplies for the next few months despite the forecast increasing consumption of “black gold”.
After correcting down the growth in oil demand initially forecast for the fourth quarter of 2021, and transferring that increase to the first three months of 2022, OPEC estimates that crude oil consumption will increase this year by 4.2 mbd.
With this, it would total 100.6 mbd on average, a level higher than before the pandemic and a historical record in annual terms.
OPEC + will study the situation again at its next telematic meeting, called for February 2. (I)
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