Later today, ministers from the Organization of Petroleum Exporting Countries (OPEC) and allies led by Russia will convene as OPEC. If necessary, the panel known as the Joint Ministerial Monitoring Committee, can summon a full OPEC+ meeting.
Brent crude is approaching $100 a barrel, its highest level since 2022 as tighter supply, owing in part to OPEC’s output restrictions and surging demand, overrides concerns about persistent inflation and sluggish economic growth.
The focus lies on an expected report on Saudi Arabia's and Russia's voluntary cutbacks. On September 5th, they extended cutbacks totaling 1.3 million barrels per day until the end of the year, saying they would evaluate the reduction monthly. With the price of oil rising, some analysts believe the Saudi voluntary reduction will be decreased. Others anticipate that the limits will be extended until 2024.
Saudi Energy Minister Prince Abdulaziz bin Salman, who heads the JMMC, stated earlier this month that OPEC+ cutbacks were required to calm the market, but no prices were set.
The Chairman of the Organisation of Petroleum Exporting Countries, a group of the world's main oil producers, warned CNN on Monday that a lack of investment in the oil sector presented a threat to global energy security and could push crude prices as high as $100 per barrel.
Al Ghais said population and economic growth meant there was “no way on earth” that the world’s future energy requirements could be satisfied by renewables alone, or by relying on hydrogen as an energy source.
Last Wednesday, oil prices reached their highest level in almost a year as crude supplies at a key storage hub plummeted to their lowest level since July of last year. On the fourth week of September, crude stockpiles at Cushing, Oklahoma decreased to 22 million barrels, close to the operational minimum, representing a decline of 943,000 barrels from the previous week.
“We’re running out of oil — you can see how low storage is at Cushing,” Gary Ross, hedge fund manager at Black Gold Investors, told Bloomberg. “If we’re running out at Cushing, then we’re running out in Europe, because it relies on US exports. If the US exports less, then where is Europe going to get its oil from?”
According to Energy Aspects, Russia produced an additional $2.8 billion in oil income in the third quarter compared to the April through June period. Meanwhile, Saudi Arabia has likely extracted an additional $2.6 billion throughout that same period, the equivalent of an additional $30 million each day.
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