OPEC+ to increase production target by 100,000 barrels per day in September
- OPEC+ agreed to a small production hike of 100,000 bpd for September.
- The OPEC+ ministerial meeting took up the recommendation of the Joint Ministerial Monitoring Committee.
- Saudi Arabia and the United Arab Emirates would be the only two producers in OPEC+ and the world that currently hold enough spare capacity to increase their oil production.
The OPEC+ group has given the green light to raise its oil production targets for September by 100,000 bpd, as recommended by the Joint Ministerial Monitoring Committee (JMMC) which met earlier today, correspondent Amena Bakr chief of OPEC and deputy bureau chief at Energy Intelligence, reported just as the OPEC+ ministerial meeting started on Wednesday.
Today’s OPEC+ meeting is the first meeting since the group decided to roll back all cuts from May 2020 in late August, when the current deal began.
Analysts had expected the alliance to approve either fixed targets for September compared to August, or a slight increase.
Ahead of Wednesday’s meeting, the US State Department on Tuesday approved a possible foreign military sale to Saudi Arabia, OPEC’s top producer, of PATRIOT MIM-104E (GEM-T) enhanced-guided tactical ballistic missiles and related equipment at an estimated cost of $3.05 billion. The State Department also authorized a possible foreign military sale to the United Arab Emirates (UAE) at an estimated cost of $2.245 billion.
Saudi Arabia and the United Arab Emirates would be the only two producers in OPEC+ and the world that currently hold enough spare capacity to increase their oil production. An increase of 100,000 bpd for the entire group will likely mean an increase of less than 30,000 bpd for Saudi Arabia and an increase of less than 10,000 bpd for the United Arab Emirates.
Earlier this week, a Fox Business correspondent reported that Saudi Arabia planned to make the case for higher oil production at Wednesday’s OPEC+ meeting. Edward Lawrence, Fox Business White House correspondent cited an unnamed source said King Salman of Saudi Arabia gave the assurance to US President Joe Biden when they met in the Kingdom on July 16.
Increased oil production was one of the reasons for President Biden’s visit to the Kingdom last month, although the White House refrained from saying so openly.
Oil prices jumped after the announcement.
By Tsvetana Paraskova for Oilprice.com
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