OPEC+ agreed to gradually increase oil production in the coming months, making a cautious bet on the summer economic recovery.
Contrary to all market expectations, the group came to an agreement to add more than 2 million barrels per day to global oil supplies from May to July. That would bring back about a quarter of the crude oil they still hold after a significant reduction a year ago.
With oil prices consistently above $60 a barrel, the Organization of the Petroleum Exporting Countries and its allies are forced to provide more fuel for the accelerating global economic recovery. The value of other commodities is also skyrocketing, with central banks from the US to China grappling with the potential for higher inflation while their governments pour trillions of dollars into fiscal stimulus.
Since Monday, there has been speculation that the cartel will extend the restrictions, as it did in March. Nevertheless, Saudi Arabia and its allies have become more convinced that oil demand is now strengthening, as countries such as the United States rapidly expand their vaccination programs.
A coalition of 23 countries led by Saudi Arabia and Russia will increase production by 350,000 barrels a day in May, then add the same amount in June, and increase it by 450,000 in July, Prince Abdulaziz told reporters after the meeting. On top of that, Saudi Arabia will abandon a voluntary production cut of 1 million barrels a day, while adding 250,000 barrels a day in May, 350,000 in June, and 400,000 in July, he said.
Consumers around the world, including India and the United States, are urging OPEC+ to continue to control prices, fearing that higher oil prices could exacerbate inflationary pressures around the world. Despite the fact that oil consumption in Europe is weak, because Italy, France and Germany are again imposing restrictions, while in America fuel consumption is growing rapidly, and the indicators of demand from China have increased even more.
