OPEC Plus Members Agree to a Small Increase in Oil Production

Oil prices rose immediately after the announcement but later traded flat. Oil prices are down from recent peaks, but remain high, buoyed by sanctions on the Russian economy, an OPEC Plus member, because of its invasion of Ukraine. Brent crude, the international benchmark, was about $100 a barrel and West Texas Intermediate, the U.S. benchmark, was around $94. A year ago, oil was trading at between $60 and $70 a barrel.

U.S. officials have said they expected OPEC Plus, which is co-chaired by Russia, to lift output in the coming months. Mr. Morse said Mr. Biden probably went into the meeting with the crown prince understanding that Saudi Arabia, the de facto leader of OPEC, would not agree to any significant increase in production.

“If they’re going to be increasing dramatically, even up to their capacity level of just under or at 12 million barrels a day, they need a good 90 days’ preparation,” he said, to prepare pipelines, port facilities and marketing.

Caroline Bain, the chief commodities economist at Capital Economics, said that an increase from Saudi Arabia and the United Arab Emirates, the two OPEC countries with spare capacity, would help offset drops in production from Angola, Nigeria and Libya.

Article source: https://www.nytimes.com/2022/08/03/business/energy-environment/opec-plus-meeting.html