Caution from OPEC+ producers to keep oil prices high | Your money

FRANKFURT, Germany (AP) — The OPEC oil cartel and allied producing nations are sticking to cautious increases in the amount of oil they send to the global economy, a move likely to support prices near US highs. seven years in the middle fears of a Russian military intervention against Ukraine.

The alliance of OPEC members led by Saudi Arabia and non-members led by Russia agreed on Wednesday to add 400,000 barrels a day in March. This is in line with the OPEC+ group’s plans to add this amount of oil every month and gradually restore the deep cuts made at the height of the coronavirus pandemic in 2020.

The move comes as oil prices are near their highest levels since 2014, pushing up fuel costs for drivers. US oil traded up 1.2% at $89.28, while the international benchmark Brent price was $90.09, up 1%.

Prices at these levels have led to an increase in production from the United States and other consuming countries, which in November announced a coordinated release of oil from national reservesa step that has done little to rein in rising prices as the economy rebounds from the pandemic and burns more fuel for travel and industry.

OPEC+ sticking to its plan will support oil prices, especially as several members have been unable to meet their production share. Rising oil prices affect the entire global economy in terms of rise in consumer inflation in the United States and Europe and more expensive fuel for heating, flying and driving.

U.S. drivers pay an average of $3.36 a gallon for gasoline, up 8 cents from a month ago and 94 cents from a year ago, according to the AAA Auto Club Federation. In Germany, gasoline prices hit a record high of 1.71 euros per litre, the equivalent of 7.31 dollars per gallon. Taxes account for a larger share of gas prices in Europe.

Recent price increases have also been fueled by tensions in Eastern Europe, where uncertainty around Russia and Ukraine has raised fears that Russian oil supplies could be cut off if diplomatic talks fail. and American and European sanctions materialize.

Russia is a major oil and gas producer. Some analysts believe, however, that any sanctions imposed by the United States and Europe would be aimed at spare energy reserves.

Some OPEC member countries, such as Nigeria and Angola, have not been able to increase production due to lagging oil investments. This raises the question of whether countries that can produce more — like OPEC’s de facto leader Saudi Arabia — can fill the void.

OPEC+ has a stake in stable price developments: while higher prices benefit state budgets in producing countries, members may not want to see them reach levels above $100 a barrel, while they could start to erode transport and industrial demand.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Previous Boris Johnson says Covid is responsible for rising National Insurance taxes
Next Canva buys Flourish; UAE's Qlub pockets $17m in seed capital