May 10, 2021

The world "does not want or need" an increase in oil prices

The world "does not want or need" an increase in oil prices

The members of OPEC and its main allies, led by Russia and Saudi Arabia, are scheduled to meet this Thursday and Friday in Vienna with a view to reaching an agreement to restrict their offer and thus fix oil prices. But the challenge for the 24 participating countries to achieve the required unanimous decision lies in the level of pumping, which will be taken as a basis, or how much will each be reduced.

Donald Trump took advantage of this event to demand that the cartel maintain the flow of crude oil without restrictions, since the world "neither wants nor needs an increase in the price of oil," the president said in his personal Twitter account.

The president of OPEC, Suhail bin Mohamed Faraj al Mazue, expects all the producers involved, 15 internal countries and 9 from outside the organization, to support the requirements they need to "balance the market", as he assured the press in Vienna.

In recent days, Trump has led a crusade against the increase in the price of oil, which saw how on Monday, despite his efforts, it was up almost 4% and sold at $ 60.64 a barrel, largely due to to the commercial truce agreed by the United States and China. The OPEC meeting seeks to control these oscillations generated by external factors.

Experts warn that, if a common solution is not reached, a considerable collapse in prices could occur and they recognize that the situation is complex. Among the various challenges that arise, highlights the rise of the exploitation of shale oil in the United States. Even so, analysts warn that the market already has a cut announcement of between 1 and 1.5 million barrels per day.

It was above all the recent announcement that Riyadh and Moscow agreed to extend their oil cooperation beyond the end of the year, which strengthened the expectation in the markets of a cut in production. Russian President Vladimir Putin unveiled the pact on Saturday during the G20 summit in Buenos Aires, where he met with the Saudi Crown Prince, Mohamed bin Salman.

The United States, already number one in the production of oil on the planet, is the main rival of the alliance, nicknamed "OPEP +", was forged two years ago between the organization and other producers to achieve price recovery after the collapse of about 80% that they experienced between 2014 and 2016.

The barrel of Brent, which started today's session at 61.11 dollars, reached over 86 dollars at the beginning of October, before falling to less than 60 dollars last Friday and rebound on Monday more than 5%.


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