August 17, 2021

This Is Why Oil Prices Fail To Maintain Profits

 The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia believe the oil market should not increase more crude oil production, as demanded by the United States.

Last week, the administration of US President Joe Biden had urged OPEC to increase production to address rising gasoline prices which it saw as a threat to the global economic recovery.

However, according to sources from OPEC, they do not see the need to produce additional oil faster and there are no concerns that the planned hike schedule will make demand unmet.

OPEC+ agreed in July to increase output by 400,000 barrels per day a month starting August until the current reduction in oil production of 5.8 million barrels per day is completely stopped.

Oil prices initially rose following the report, but declined again following increased pressure from the increasingly alarming Covid-19 outbreak around the world.

Most recently, New Zealand announced a three-day level 4 blockade measure nationwide, and seven days in Auckland after the first Covid-19 community case was detected in the city today.

Brent crude futures traded lower at $ 68.90 a barrel in the European session, while US WTI was down $ 66.47 a barrel.