New York. The price of Texas intermediate oil (WTI) rose 1.4% yesterday and closed at 116.87 dollars a barrel, after the announcement by OPEC+ to increase its production faster than expected, amid increased geopolitical tensions due to the invasion Russian in Ukraine.
At the close of trading on the New York Mercantile Exchange (Nymex), WTI futures contracts for July delivery were up $1.61 from the previous close.
The OPEC Oil Alliance and ten other producers, led by Russia, decided to increase their crude oil production in July and August more than expected until now, with an additional 648,000 barrels per day (bd).
With these increases, the Organization of Petroleum Exporting Countries (OPEC) and its allies return to the market the almost 10 million barrels per day that they cut in April 2020 in response to the collapse of consumption due to the restrictions caused by covid-19.
This increase is 50% higher than in recent months -432,000 bd- within a plan to gradually open the spigots every 30 days, the OPEC+ alliance said in a statement, after a ministerial meeting held virtually. The extraordinary rise is due to the fact that OPEC advances the increase from September to July and August, which means that in each of those months an additional 216,000 barrels are added, that is, just 50% more.
Yesterday’s decision comes after the fall in Russian production due to Western sanctions for the invasion of Ukraine, and calls from consumer countries to increase OPEC + production and thus curb high energy costs.
Russia, which is the second largest exporter of black gold in the world behind Saudi Arabia, warned today that the new sanctions adopted by the European Union against Moscow, which include a partial embargo on Russian oil, will have a “self-destructive effect” for the Twenty seven.
