OPEC and its oil-producing partners have agreed to maintain their current output levels. They refuse to ease the faucets in the face of multiyear highs in crude prices and U.S. pressure to assist cool the market. OPEC+ will continue its August schedule of gradually raising monthly oil output by 400,000 barrels per day. Today, the decision reinforced to preserve the previously agreed-upon limitations.
When asked why the group was not increasing output despite concerns and requests from oil customers such as the United States, India, and Japan, Novak responded that OPEC and its partners maintained market balance. Moreover he added that they are mindful of potential shifts in demand.
It essentially emphasizes the fact that global oil consumption is still under pressure from the delta COVID variety. Moreover, it is due to the preservation of various constraints and COVID measures in some countries.
Ministers point to gas, coal
Several OPEC ministers speaking at the news conference used the increasing costs of other commodities such as gas and coal to argue that oil markets are fortunate to have OPEC+ managing supply.
“Look at the gas market, look at the coal market, the lack of a market governor makes it very tough for the consuming nations when there is a significant spike in commodity prices,” Al Mazrouei said. This industry has taken a beating. People require indications, market signals to invest. For them to have confidence and believe that these investments will be beneficial to shareholders if they occur.
Caution is critical for OPEC+
Indeed, oil-producing countries appear to prioritize caution.
“OPEC has made it plain that we are looking at supply and demand, not pricing”. This was a remark from Nigerian Minister of State for Petroleum Timipre Sylva. Especially when compared to what is going on in the gas sector. As a responsible firm, this is the moment to observe the market. Prices above $80 per barrel are another reason OPEC+ will be reticent to add supply to the market, especially since U.S. producers have demonstrated little desire to boost output.
Gold was up in Asia on Friday morning, heading for a weekly gain. Investors were also analyzing recent policy decisions from the Bank of England and the United States Federal Reserve.
Gold futures rose 0.06 percent to $1,794.65, on track for its second weekly rise in three weeks, with a 0.7 percent gain.
The Bank of England held its interest rate unchanged at 0.10 percent in its announcement on Thursday. The move surprised investors, who had expected the BOE to be one of the first major central banks to raise interest rates after the outbreak of COVID-19.
The Fed announced its own decision a day earlier, saying that it would begin asset tapering but be “patient” on interest rate hikes.
According to data released earlier in the day in the Asia Pacific, Japan’s household spending fell 1.9 percent year on year September in September. However, it increased by 5% month over month.
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