16.11.202112:09 Forex Analysis & Reviews: OPEC will not give in to US pressure

Saudi Arabia and the United Arab Emirates made it clear that OPEC will continue to prudently ramp up oil production and will not yield to US pressure for a faster increase in output.

US President Joe Biden, who was very worried that gasoline prices, which are at a seven-year high, are fueling inflation in the US, urged the alliance to deviate from its plan to gradually increase production. He requested this to lower oil prices.

Currently, OPEC is increasing production by 400,000 b/p a month, which, according to UAE Energy Minister Suhail Al Mazroui, should be enough. The next meeting of OPEC will take place on December 2.

In any case, crude oil prices this year have risen by about 60% to over $ 80 a barrel. Several energy executives and leaders said prices could rise to $ 100. To date, oil is trading below $ 82 with a high of $ 85.

Mazroui said the oil market will move from a supply deficit to a surplus early next year, which is one of the main reasons OPEC should not pursue aggressive policies.

Oil stocks have plummeted since OPEC began a sharp cut in supplies in early 2020, but according to Prince Abdulaziz, it will recover again starting next month.

Also, none of the ministers said the projections would change if some of the group's members continued to work below their targets. In October, the organization was able to increase supplies by around 250,000 barrels per day because Nigeria and Angola are struggling amid a lack of investment in development.

Abdulaziz is not worried that the US will have to sell oil from its strategic oil reserve in order to lower prices.

Oman's energy minister, Mohammed bin Hamad Al Rumhi, also said that OPEC does not need to accelerate production. As such, at its December meeting, the group is likely to decide to stick to monthly increases of 400,000 barrels.