On June 2 local time, at the 29th ministerial meeting of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing Countries (OPEC+), ministers decided to increase crude oil production by 648,000 barrels per day in July and August 2022. Global energy pri

On June 2 local time, at the 29th ministerial meeting of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing Countries (OPEC+), the ministers decided to increase crude oil production by 648,000 barrels per day in July and August 2022.

Global energy prices continue to soar due to the serious damage caused by the Russian-Ukrainian conflict and European and American sanctions on the global energy market. Under pressure from multiple parties, OPEC+ agreed to increase the output by about 50%, increasing production by 648,000 barrels per day in July and August, higher than the daily production increase of 432,000 barrels in recent months, ending the historic production cuts implemented by the organization during the new crown pandemic early, and the agreement retains Russia's core position in the organization. Whether this decision can alleviate the global energy supply crisis remains to be seen. Overnight crude oil futures prices opened low and closed higher, with West Texas Intermediate crude oil (WTI), the benchmark for U.S. crude oil price, rising 1.4%, closing at $116.87 per barrel; ICE Brent crude oil , the benchmark for international crude oil prices, rising 1% to close at $117.53 per barrel. Before

OPEC+ made the decision to increase production, there was news that as part of the international tour of the NATO summit held in the Spanish capital Madrid and the G7 (G7) conference in Munich, US President Biden may visit Saudi later this month - the United States has always claimed that global crude oil demand rebounds much faster than expected, but in this case, Saudi Arabia, as a major global crude oil supplier, has been sticking to its monthly gradual increase in production, always refusing to increase oil exports quickly, and even repeatedly claimed that there is no problem of crude oil shortage. Therefore, the decision to end the historic production cuts early is a huge turning point for OPEC+. "The United States welcomes the important decision to increase production by OPEC+." While making this statement, White House Press Secretary reiterated that the United States did not participate in the discussion of OPEC+'s decision to increase production.

Some analysts said that Saudi Arabia and other countries decided to speed up the increase in crude oil production, not only to make up for the shortage of crude oil supply due to Russia's sanctions, but also to alleviate the inflation formed worldwide due to soaring energy prices.

As Dong Xiaoyu, a researcher at the Energy Policy Research Center of the China Energy Research Association, previously analyzed in an interview with First Financial reporter, "When the Russian-Ukrainian conflict cannot see a eased trend, the Organization of Petroleum Exporting Countries should increase capacity coordination, and the United States should fulfill its promise to release strategic oil reserves to minimize the contradiction between energy supply and demand."

However, analysts are cautious about whether the decision to increase production can alleviate the supply crisis.

"OPEC+'s decision to increase production quotas in July and August is not enough to change the global oil balance, and the increased production does not offset the seasonal peaks and increase in demand." Natasha Kaneva, head of commodity research at JPMorgan Chase, said the risks faced by the bank's supply forecasts are biased toward the downward trend. JPMorgan Chase maintained its previous expectations for the average price of Brent in the second quarter of 2022, and maintained its average price of 2022 USD 104 per barrel, with the monthly average price peaking at $122 in June.

RBC analyst Helima Croft believes that the OPEC+ increase in production may be implemented by Saudi Arabia, because the UAE may not have much idle capacity available, "It looks like Saudi Arabia is expected to increase production to about 11 million barrels per day in July and August."

It is reported that the 30th ministerial meeting of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing Countries (OPEC+) will be held on June 30.