The Wall Street Journal (WSJ) on Wednesday (24th) quoted people familiar with the matter as reporting that after the United States and other countries released crude oil reserves to reduce oil prices, the two major oil-producing countries, Saudi Arabia and Russia, are considering suspending their recent production increase plans to avoid hits. Chaotic supply and demand balance.
The two countries took the lead in coordinating the production plans of the Organization of Petroleum Exporting Countries and the Allies (OPEC+), but sources revealed that OPEC+ members such as the UAE and Kuwait do not believe it is necessary to suspend the increase in production.
Due to the intermittent restrictions on the new crown epidemic, the Organization of the Petroleum Exporting Countries (OPEC) and other forecasting agencies have been having difficulty predicting demand, and oil prices have been hovering near multi-year highs.
Recently, several European countries are considering new epidemic prevention measures, which may affect economic activities and weaken oil demand. In addition, the release of 70 million barrels of crude oil reserves led by the United States may further disrupt the balance of supply and demand.
The OPEC representative said that in response to the new supply, Saudi Arabia and Russia are currently considering suspending their monthly production increase plans, but both the UAE and Kuwait currently refuse to suspend production.
According to people familiar with the matter, Saudi Arabia believes that the release of crude oil reserves may increase global supply and may depress oil prices.
US President Biden has repeatedly called OPEC+ to increase production. However, the organization ignored Biden’s call and maintained the original production increase plan. Finally, Biden and other countries jointly released Strategic Oil Storage (SPR) to keep oil prices down.
OPEC+ will hold a meeting next week to reconsider the current plan to increase production by 400,000 barrels per month until next year.