OPEC Snubs US, Insists On 400,000 Barrels Per Day Production Output

The Organization of Petroleum Exporting Countries is insisting on its plans to increase production output for members to 400,000 barrels per day despite the debate to end fossil fuels at COP26 in Glasgow.

The cartel reached the decision at the 22nd OPEC and non-OPEC Ministerial Meeting, held via videoconference on Thursday.

OPEC had been under pressure to increase the output cut by more than the planned 400,000b/d.

President Joe Biden had said on Tuesday at COP26 that rising gasoline prices are the consequence of “the refusal of Russia or the OPEC nations to pump more oil.”

OPEC and allies, OPEC+ had cut global oil by 10 million barrels per day, which is about 10 per cent of world demand.

This happened when the Covid-19 pandemic slowed global energy demand.

OPEC said in its communique that sticking to its plan would ensure a stable and a balanced oil market.

The cartel said, “Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020 and further endorsed in subsequent meetings including the 19th OPEC and non-OPEC Ministerial Meeting on the 18 July 2021.

“Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC Ministerial Meeting and the decision to adjust upward the monthly overall production by 0.4 mb/d for the month of December 2021, as per the attached schedule.

“Reiterate the critical importance of adhering to full conformity and to the compensation mechanism, taking advantage of the extension of the compensation period until the end of December 2021. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.”

With the decision by OPEC, WTI Crude surged by 0.28 per cent to $81.20/b, while Brent Crude also rose 0.60 per cent to $82.59 per barrel.