Wednesday , January 27 2021

OPEC will produce 2% less oil in six months to increase fuel costs

Russia, Saudi Arabia, and members of the Organization of Petroleum Exporting Countries (Opec) announced on Friday that from January 1, cut oil production by 1.2 million barrels per day by June 30, 2019, will soon trigger the reaction of the president of the United States, Donald Trump, which in the previous one had asked for the activity to continue, as it has been so far. By contrast, the leader of the Bolivarian Republic of Venezuela, Nicholas MaduroHe thanks Vladimir Putin and Mohammed bin Salman to change the strategy.

The aim of the OPEC countries and their allies is to raise the international price of oil by reducing by 2% the daily barrels productionIf this is achieved, oil companies could transfer these costs to gas station pumps.

OPEC members have to reduce their 800,000 barrels per day, while their allies will have to reduce the remaining 400,000. However, Venezuela, Libya and Iran, members of the first group, will be released for their "special circumstances".

Thus Maduro will achieve in the first half of 2019 a larger inflow of foreign currency in the country, because Petróleos de Venezuela (PDVSA) will have a higher turnover with the same production as the previous semester, "The deal is important to our economy," said Maduro after meeting with Putin in Moscow.

The main agreement was in Pact between Russia and Saudi Arabia, the two largest exporters who want a barrel back to $ 100. The price dropped to $ 30 in 2016, then rose to $ 85 in October and fell to $ 60 in December.

Following the announcement of OPEC, markets did not take much time to react: WTI prices rose 2.2% on Friday (52.61 dollars), and Brent's future ended in February with 2.72% (61.76 dollars) in London.

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