By Tsvetana Paraskova – August 3, 2022 at 7:49 am CDT
- OPEC+ agreed to a small production increase of 100,000 bpd for September.
- The OPEC+ ministerial meeting took up the recommendation of the Joint Ministerial Follow-up Committee.
- Saudi Arabia and the United Arab Emirates are believed to be the only two producers in OPEC+ and the world that currently have enough spare capacity to increase their oil production.
The OPEC+ group gave the go-ahead to raise its oil production targets for September by 100,000 bpd, as recommended by the Joint Ministerial Monitoring Committee (JMMC) that met earlier today, Amena reported Bakr, OPEC Chief Correspondent and Deputy Chief of the Energy Intelligence Bureau. as the OPEC+ ministerial meeting began on Wednesday.
Today’s OPEC+ meeting is the first meeting since the group decided in late August to roll back all cuts from May 2020, when the current deal began.
Analysts had expected the alliance to approve flat targets for September compared with August, or a slight increase.
Ahead of Wednesday’s meeting, the U.S. State Department on Tuesday approved a potential foreign military sale to Saudi Arabia — OPEC’s top producer — of PATRIOT MIM-104E (GEM- T) and related equipment for an estimated cost of $3.05 billion. The State Department also authorized a possible foreign military sale to the United Arab Emirates (UAE) at an estimated cost of $2.245 billion.
Saudi Arabia and the United Arab Emirates are believed to be the only two producers in OPEC+ and the world that currently have enough spare capacity to increase their oil production. An increase of 100,000 bpd for the whole group will likely mean less than 30,000 bpd for Saudi Arabia and less than 10,000 bpd for the UAE.
Earlier this week, a Fox Business correspondent reported that Saudi Arabia planned to advocate for higher oil production at Wednesday’s OPEC+ meeting. Fox Business White House correspondent Edward Lawrence cited an unnamed source as saying that King Salman of Saudi Arabia had made the assurance to US President Joe Biden during their meeting in the Kingdom on 16 of July
The increase in oil production was one of the reasons for President Biden’s visit to the Kingdom last month, although the White House refrained from openly stating this.
Oil prices rose after the announcement.
By Tsvetana Paraskova for Oilprice.com
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