OPEC+ agrees to boost oil supply as prices surge
Prices have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic
Check out what's clicking on FoxBusiness.com.
OPEC+ ministers agreed on Sunday to boost oil supply from August to cool prices which have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic.
The group, which includes OPEC countries and allies like Russia, crucially agreed new production allocations from May 2022 to overcome differences between Saudi Arabia and the United Arab Emirates (UAE) that threatened the plan.
OPEC+ last year cut production by a record 10 million barrels per day (bpd) amid a pandemic-induced slump in demand and collapsing prices. It has gradually reinstated some supply to leave it with a reduction of about 5.8 million bpd.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
From August until December 2021 the group will increase supply by a further 2 million bpd or 0.4 million bpd a month, OPEC said in a statement.
The group had agreed to extend their overall pact until the end of 2022 from an earlier planned date of April 2022, to leave more room for manoeuvre in case global recovery stalls due to new virus variants.
Whilst both Riyadh and the UAE had been supportive of an immediate output boost, the UAE had objected to the Saudi idea to extend the pact to December 2022 without getting a higher production quota.
To overcome the disagreement, OPEC+ agreed new output quotas for several members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.
RISING GAS PRICES MAY STABILIZE 'SOON,' EXPERT SAYS
The overall adjustment will add 1.63 million bpd to supply from May next year, according to Reuters calculations.
The UAE will see its baseline production, from which cuts are being calculated, increase to 3.5 million bpd from May 2022 from today's 3.168 million.
CLICK HERE TO READ MORE ON FOX BUSINESS
Saudi and Russia will see their baselines rise to 11.5 million bpd each from the current 11 million.
(Reporting by Olesya Astakhova, Rania El Gamal, Alex Lawler, Ahmad Ghaddar and Dmitry Zhdannikov; Writing by Dmitry Zhdannikov; Editing by Elaine Hardcastle)