OPEC+ may increase production? Kazakhstan signals output increase ahead of key meeting


2022-08-03: [Chinese Article Link]  On Wednesday (3 August) local time, Kazakhstan will hold a key oil ministerial meeting to discuss OPEC+ production quotas in September. In the run-up to the meeting, Kazakhstan, as one of the OPEC+ member States, indicated that it might be necessary to increase oil production in order to avoid overheating the market, which could be a sign of a small increase in OPEC production. On Wednesday (3 August), local time, OPEC will hold a key oil ministerial meeting to discuss OPEC+ production quotas in September. In the run-up to the meeting, Kazakhstan, as one of the OPEC+ member States, indicated that it might be necessary to increase oil production in order to avoid overheating the market, which could be a sign of a small increase in OPEC production. Is Kazakhstan suspected of releasing an increase in production? Since the outbreak of the Russian-Ukraine war, international energy prices have soared as European and American sanctions against Russia have intensified. To boost the price of oil, the US has been demanding an increase in OPEC’s output. In recent months, however, OPEC has been able to reduce its output in line with its target of about 430,000 to 650,000 barrels per month, and has refused to increase it further. Prior to his visit to the Middle East, US President Biden tried to put pressure on Saudi Arabia and the United Arab Emirates to push for further growth of the OPEC. However, Biden must face the reality that most of its member countries no longer have much idle capacity, even if they want to increase their production. As a result, the market's earlier general expectation was that OPEC+ might choose to maintain production constant at today's meeting, or to opt for a small increase. However, on the eve of the meeting, the Minister of Energy of Kazakhstan, Bolat Akchulakov, stated publicly: “We have always said that the preferred (oil) price range is between $60 and $80 per barrel. The current (oil) price is $100. We may therefore have to increase production to avoid overheating the economy.” “For the time being, there is a problem that production should perhaps be increased in order to avoid overheating demand... The post-Covid-19 outbreak demand is growing.” This statement may make the market more suspicious of the OPEC+ option. However, there are also external media reports, with three sources saying that the probability of increasing oil production remains low at today’s meeting. OPEC+ will be very difficult to make a big move. According to external sources citing information from within OPEC, member states lack idle capacity to significantly increase oil production. As part of the OPEC+ group, OPEC needs to cooperate further with Russia. According to Callum Macpherson, an English investment analyst for Investec, “OPEC+ is unlikely to take any action at a later meeting today.” He noted that current market concerns about the global slowdown in the global economy continued to warm, while OPEC was trapped in a lack of productive capacity, leaving it with insufficient incentives and capacity to increase production. He added that the unexpected decision to increase production by OPEC+ would put oil prices under further pressure, falling below $100 per barrel. Indeed, following the earlier release of the booster signal by the Minister of Energy of Kazakhstan, Brent crude oil suffered a rapid setback, with a drop of $100 per barrel as of the date of the release, at $99.47 per barrel. In May 2020, as a result of the Covid-19 epidemic, OPEC+ implemented a record-scale reduction in production. According to its original production recovery plan, OPEC+ should have returned to full prenatal reduction by September this year. However, as a result of the sanctions imposed on some of the OPEC+ member States and the insufficient investment in oil in other countries and the limited capacity to increase production, the real production of OPEC+ was still 3 million barrels/day below its original target as of June this year. The market now generally anticipates that only Saudi Arabia and the United Arab Emirates have some surplus capacity in OPEC+ member countries to increase production. But French President Macron claimed earlier that he had been informed that the remaining capacity in Saudi Arabia and the United Arab Emirates was also very limited. (Source: IFA)


Note: This is a machine translated version of the Chinese news media article. A mature and nuanced reading is suggested.




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OPEC+ may increase production? Kazakhstan signals output increase ahead of key meeting


2022-08-03: [Article Link]  On Wednesday (3 August) local time, Kazakhstan will hold a key oil ministerial meeting to discuss OPEC+ production quotas in September. In the run-up to the meeting, Kazakhstan, as one of the OPEC+ member States, indicated that it might be necessary to increase oil production in order to avoid overheating the market, which could be a sign of a small increase in OPEC production. On Wednesday (3 August), local time, OPEC will hold a key oil ministerial meeting to discuss OPEC+ production quotas in September. In the run-up to the meeting, Kazakhstan, as one of the OPEC+ member States, indicated that it might be necessary to increase oil production in order to avoid overheating the market, which could be a sign of a small increase in OPEC production. Is Kazakhstan suspected of releasing an increase in production? Since the outbreak of the Russian-Ukraine war, international energy prices have soared as European and American sanctions against Russia have intensified. To boost the price of oil, the US has been demanding an increase in OPEC’s output. In recent months, however, OPEC has been able to reduce its output in line with its target of about 430,000 to 650,000 barrels per month, and has refused to increase it further. Prior to his visit to the Middle East, US President Biden tried to put pressure on Saudi Arabia and the United Arab Emirates to push for further growth of the OPEC. However, Biden must face the reality that most of its member countries no longer have much idle capacity, even if they want to increase their production. As a result, the market's earlier general expectation was that OPEC+ might choose to maintain production constant at today's meeting, or to opt for a small increase. However, on the eve of the meeting, the Minister of Energy of Kazakhstan, Bolat Akchulakov, stated publicly: “We have always said that the preferred (oil) price range is between $60 and $80 per barrel. The current (oil) price is $100. We may therefore have to increase production to avoid overheating the economy.” “For the time being, there is a problem that production should perhaps be increased in order to avoid overheating demand... The post-Covid-19 outbreak demand is growing.” This statement may make the market more suspicious of the OPEC+ option. However, there are also external media reports, with three sources saying that the probability of increasing oil production remains low at today’s meeting. OPEC+ will be very difficult to make a big move. According to external sources citing information from within OPEC, member states lack idle capacity to significantly increase oil production. As part of the OPEC+ group, OPEC needs to cooperate further with Russia. According to Callum Macpherson, an English investment analyst for Investec, “OPEC+ is unlikely to take any action at a later meeting today.” He noted that current market concerns about the global slowdown in the global economy continued to warm, while OPEC was trapped in a lack of productive capacity, leaving it with insufficient incentives and capacity to increase production. He added that the unexpected decision to increase production by OPEC+ would put oil prices under further pressure, falling below $100 per barrel. Indeed, following the earlier release of the booster signal by the Minister of Energy of Kazakhstan, Brent crude oil suffered a rapid setback, with a drop of $100 per barrel as of the date of the release, at $99.47 per barrel. In May 2020, as a result of the Covid-19 epidemic, OPEC+ implemented a record-scale reduction in production. According to its original production recovery plan, OPEC+ should have returned to full prenatal reduction by September this year. However, as a result of the sanctions imposed on some of the OPEC+ member States and the insufficient investment in oil in other countries and the limited capacity to increase production, the real production of OPEC+ was still 3 million barrels/day below its original target as of June this year. The market now generally anticipates that only Saudi Arabia and the United Arab Emirates have some surplus capacity in OPEC+ member countries to increase production. But French President Macron claimed earlier that he had been informed that the remaining capacity in Saudi Arabia and the United Arab Emirates was also very limited. (Source: IFA)

Note: This is a translated version of the Chinese news media article. A mature and nuanced reading is suggested.

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