OPEC Sticks to Production Plan Despite Western Pleas for Increases
May 27, 2022
The Energy Markets are closed on Monday for Memorial Day, there is no forward contracting that day.
Six OPEC+ sources stated the OPEC+ is set to stick to an oil production deal agreed to last year at its meeting on June 2 and raise July output targets by 432,000 bpd, despite Western calls for a faster increase to lower surging prices. Members from the group maintain that the oil market is balanced and that the recent price hikes are not related to fundamentals. In April, OPEC+ produced 2.6 million bpd below its targets, with Russia accounting for half of the shortfall.
The European Union continues to struggle with coming to some agreement on an embargo of Russian crude oil. There were reports that they were considering an embargo on just waterborne imports but allowing the pipeline deliveries to continue. One comment says they are close to a deal, and another contradicts that idea. There is and EU summit starting on Monday and this maybe the last opportunity to decide on something with regards to an embargo. Germany’s Economic Minister Robert Hack said the group may need to consider other instruments.
The UK has announced a 25% windfall tax on oil and gas producers’ profits. This money will be used to help household struggling to meet soaring energy bills.