OPEC meets on production boost as oil prices rise
OPEC and its allies are meeting on Monday to discuss how much oil needs to be supplied to the hot market, where the recovery in demand shaken by the coronavirus pandemic has pushed oil above $80 a barrel.
The situation became even more critical with oil prices soaring to a three-year high, gas prices rising 300% and trading at close to $200 a barrel due to shortages in supply and low production of other fuels.
Oil, natural gas and coal prices increased, British gas stations dried up, energy costs increased in the European Union before winter, and China imposed restrictions on energy use.
Spain, Italy, Greece, the UK and others are planning various national measures aimed at protecting economies from rising costs as they recover from the COVID-19 pandemic.
Low coal production in China has led to a steep climb in domestic thermal coal prices, which have repeatedly reached record levels this year and soared more than 80%. Coal-fired power plants in Beijing cannot operate economically with such high coal costs and are shutting down.
It is not correct to say that the world is suddenly experiencing an energy shortage. The inconveniences have common points. These combinations are the recovery of energy demand from the depths of the coronavirus crisis that has pushed up oil, gas and coal prices, continued supply restrictions by the oil cartel OPEC, and global transportation bottlenecks that make fuel distribution difficult.
The Organization of the Petroleum Exporting Countries OPEC+ and its allies including Russia, agreed in July to increase production by 400,000 barrels per day through at least April 2022, and to phase out 5.8 million barrels of existing cuts.
Some OPEC+ sources said last week that manufacturers are considering adding more products than anticipated, but none gave details on how much or when.
Increasing oil, gas, coal and electricity prices affect especially large economies, feeding inflationary pressures around the world and destabilizing and slowing the recovery.
A senior aide to U.S. President Joe Biden, who met with Saudi Crown Prince Mohammed bin Salman in Saudi Arabia last week to discuss the war in Yemen, said oil is also worrying.
By the way, Russian oil and gas condensate production was 10.72 million barrels in September, the highest since 11.34 million barrels pumped in April 2020, data released on Saturday.
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