(Updated with OPEC decisions, oil prices)
by Alex Lawler, Rania El Gamal and Olesya Astakhova
LONDON / DUBAI / MOSCOW, December 3 (Reuters) – The Organization of the Petroleum Exporting Countries and its allies, referred to as OPEC +, have agreed to increase their oil production from 500,000 barrels per day (bpd) to from January.
Cartel members failed to find common ground on a broader, longer-term strategy for the remainder of 2021.
This increase means that the supply limitation will be reduced from January to 7.2 million bpd.
These production cuts are a response to weak demand for crude amid the resurgence of the coronavirus epidemic.
A renewal of the production reduction agreement until March was the expected scenario.
But the sharp rise in crude oil prices in November, encouraged by the hope of rapidly seeing one or more vaccines against COVID-19 deployed, has led several countries to question this strategy, defended among others by Saudi Arabia but which reduces the oil revenues of the countries concerned.
Several sources within OPEC + have reported that Russia, Iraq, Nigeria and the United Arab Emirates have expressed their willingness to increase oil supply in 2021.
Russian Energy Minister Alexander Novak has announced that OPEC + members have agreed to meet monthly to adjust their policy beyond January but that the monthly output increase will not exceed 500,000 bpd.
He said cuts from countries with overproduction in previous months had been extended until March 2021.
OPEC + is faced with a balancing act to push oil prices up and support the economies of member countries while trying to limit price increases in order to avoid a resumption of a surge in state production -United.
Around 7:00 p.m. GMT, a barrel of Brent was trading at $ 48.82, up 1.18%, while US light crude (WTI) was up 0.93% to $ 45.7.
“With US oil production on the rise, OPEC + could not allow the US to gain market share at its expense,” said Edward Moya, senior market analyst at OANDA in New York. (With Ahmad Ghaddar in London, Vladimir Soldatkin in London and Scott DiSavino in New York, French version Marc Angrand and Laetitia Volga, edited by Nicolas Delame)
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