Xinhua News Agency, Beijing, January 5th, by wire Summary: Improving demand outlook, major oil-producing countries maintain production increase plans
Xinhua News Agency reporter
The Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries held the 24th ministerial meeting via video on the 4th and decided to maintain the original plan for increasing production.
According to the OPEC statement, the participating oil-producing countries reconfirmed the production adjustment plan and the monthly production adjustment mechanism approved by the 19th Ministerial Conference, and decided to increase the monthly total production in February this year by 400,000 barrels per day according to the original schedule.
The OPEC statement downplayed the impact of the mutant new crown virus Omi Keron strain, believing that its impact was mild and short-lived and did not severely hit oil demand. In addition, the economic prospects of advanced economies and emerging economies are relatively stable, and the world is capable of responding to challenges such as the epidemic.
Despite the recent surge in the number of people infected with the Omi Keron strain, many European countries have not adopted large-scale bans to avoid the epidemic from hindering the economic recovery process.
ING said that the Omi Keron strain is more contagious, but less lethal, helping to alleviate some concerns about oil demand. Ole Hansen, Head of Commodity Strategy at Saxo Bank in Denmark, pointed out that considering the limited impact of the Omi Keron strain on global oil demand, major oil-producing countries have no reason not to maintain the original increase in production plan.
OPEC and non-OPEC oil-producing countries are scheduled to hold the 25th ministerial meeting on February 2 to assess market conditions and determine the level of production next month.
The latest decisions of major oil-producing countries are in line with market expectations, pushing international oil prices to regain their upward trend. As of the close of the day, the price of light crude oil futures for delivery in February 2022 on the New York Mercantile Exchange rose 0.91 US dollars to close at 76.99 US dollars per barrel, an increase of 1.20%. The price of London Brent crude oil futures for delivery in March 2022 rose by US$1.02 to close at US$80 per barrel, an increase of 1.29%.
Analysts believe that in addition to the easing of market concerns about the epidemic and boosting demand expectations, geopolitical uncertainties such as the tightening of relations between Russia and Ukraine and negotiations on the Iranian nuclear issue are expected to provide support for international oil prices for some time to come.
According to Joe Perry, a senior analyst at the Forex broker, Jiasheng Group, the United States and other countries released crude oil reserves in response to rising oil prices in December 2021, and may soon need to replenish inventories to further boost demand.
Edward Moya, a senior market analyst at Anda Corporation, an online foreign exchange trading platform, believes that the price of Brent crude oil futures is expected to remain in the range of US$80 per barrel for some time to come, and the price of New York crude oil futures is likely to consolidate at the level of US$77 per barrel.
OPEC-elected Secretary-General Haitham Ghaith said that by the end of 2022, global oil demand is expected to return to pre-epidemic levels.
Due to the impact of the new crown epidemic on oil demand, OPEC and non-OPEC oil-producing countries reached a production reduction agreement in April 2020. In April 2021, OPEC and non-OPEC oil-producing countries decided to gradually increase oil production from May 2021. In July 2021, OPEC and non-OPEC oil-producing countries reached an agreement at the 19th ministerial meeting, agreeing to increase their total output by 400,000 barrels per day from August 2021. (Participating reporters: Yu Tao, Kang Yi, Liu Yanan)Return to Sohu to see more
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