OPEC Wants to Boost Production, Crude Oil Prices Keep Flying

Jakarta, CNBC Indonesia – World crude oil prices moved up this week even though producers agreed to increase production.

Brent crude oil contract price closed at US$ 119.72/barrel. Brent crude oil prices edged up 0.24% in the week.

Meanwhile, the price of US benchmark West Texas Intermediate (WTI) crude oil rose 3.3% in the past week to a level of US$ 118.87/barrel.

Crude oil prices have consistently been above US$ 100/barrel since mid-April.

The organization of oil producers and exporters known as OPEC agreed to increase crude oil production by 648,000 barrels per day (bpd) starting in July and August.

The decision was higher than OPEC’s previous plan to increase production by 432,000 bpd.

Crude oil prices are still able to rise due to the opening of China’s economy after the Covid-19 case is getting more under control, it is hoped that the global oil balance will not change too much from before.

The economic opening in Shang Hai and Beijing is expected to boost demand. It should be noted that China is the world’s largest oil consumer, so easing lockdown will increase the demand for fossil fuels.

Meanwhile, the price of US crude oil was still able to record an increase due to tight supply in the US, triggering the discourse to limit oil exports.

President Joe Biden said he would travel to Saudi Arabia to meet with Crown Prince Muhammad bin Salman to lobby for various scenarios so that the Arabs would increase production so that oil prices would fall and inflation in the US would decrease.

It is undeniable that oil prices continue to rise, making inflation in various countries, especially the US and Europe increasingly unstoppable.

The increase in oil and gas prices was also triggered by the endless conflict between Russia and Ukraine, which also affected global supply conditions.

Just so you know, Russia is one of the global oil producers with a market share of 11% of total global output and is a member of OPEC+.

Russia’s war with Ukraine has made the Red Bear Country’s economy shaken because of various economic sanctions that have hit. As a result, economic activity slowed and production fell.

With a large market share, it is logical that the total global supply will also be affected.

[Gambas:Video CNBC]