05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –        05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –        05/12  closing prices/ revised 05/16/2022 11:38 GMT  | 05/12   OPEC Basket $112.37  +3.34| 05/13    Mexico Basket (MME)  $106.36  +4.22| 03/31 ▲  Venezuela Basket $88.12  (Estimated OPEC) | 05/13   Brent July BRN00 $111.55  +4.10| 05/13 WTI  Texas Intermediate Jun CL00  $110.49  +4.36 | 05/13   Natural Gas May NGM22  $7.663  -0.076| 05/13 Gasoline Jun RBM22    $3.9578  +0.1661 |  05/13 Heating Oil  Jun  HOK22   $ 3.9212  -0.0051 |  06/13  Active U.S. Rig Count (Oil & Gas)  714  +9 | 05/16   USD/MXN Mexican Peso  $20.1013  Live data | 05/16  EUR/USD $1.0430  Live data | 05/16  USD/Bs. (Bolivar)  $4.77050000  |  –       

Stanley Reed/NYT -OPEC and Russia Agree to Increase Oil Output, Amid Concerns About Lagging Production

An oil field in eastern Siberia. Russia is the second-largest oil exporter in OPEC Plus,
but analysts questioned its ability to increase production in the short term.
Credit: Sergei Karpukhin/Reuters

By Stanley Reed/NYT

LONDON
EnergiesNet.com 01 04 2022

Officials from OPEC, Russia and other oil producers agreed on Tuesday to continue their program of gradual monthly output increases in February, but there are growing doubts about whether they can deliver on the additional barrels. The decision to increase production by 400,000 barrels a day was conveyed in a terse news release from OPEC.

A persistent failure to step up production by the amounts agreed on in July is helping to keep oil prices relatively high even though a surge in coronavirus cases from the Omicron variant threatens to dampen economic activity and oil demand.

The slow ramp up in production also could lead to tension with the Biden administration, which wants the producers to pump more oil in an effort to lower gasoline prices in the United States. Gas prices, nationally at $3.28 a gallon, are now about one-third higher than they were a year ago, according to the Energy Information Administration, a government agency, and contributing to rising inflation.What Saudi Arabia decides to do is crucial. The only route to meeting the scheduled increases in output would be for Saudi Arabia, which now has most of the world’s extra capacity, to agree to produce more than its quota.

From an oil industry perspective, Saudi Arabia, the leader of the Organization of the Petroleum Exporting Countries, has weathered the pandemic better than might have been expected. Saudi production is back around the 10-million-barrel-a-day level that the kingdom prefers, prices are relatively high, and Riyadh’s influence over oil policy is strong.

In November, the White House coordinated a planned release of strategic oil reserves with other nations in an effort to dampen the market, but prices have since edged up to more than $79 a barrel for Brent crude, the international benchmark, and $76 a barrel for West Texas Intermediate, the American standard.

In the spring of 2020, the early days of the pandemic, the oil producers group known as OPEC Plus sharply curbed production by almost 10 million barrels a day, or almost 10 percent of world supply at the time.

Building output back up again has not been easy for several countries, including Nigeria and Angola.

In its December Monthly Oil Report, the International Energy Agency estimated that OPEC Plus fell short of its November target by 650,000 barrels a day, substantially more than the 400,000 barrels a day the group had planned to increase each month.

A few producers, including Saudi Arabia and Iraq, are increasing output handily, but others in the 23-member group are lagging. A range of issues, including political strife and underinvestment in drilling, are holding them back.

Even Russia, the group’s second-largest exporter after Saudi Arabia, appears to have hit a wall at about 9.9 million barrels a day, about 600,000 less than it pumped in April 2020 before the big cuts. For Russia to increase substantially from here will require improved tax policies and the development of new fields, analysts say.

Understand Rising Gas Prices in the U.S.


A steady rise. American consumers have seen the cost of gasoline, along with many other goods and services, surge sharply in recent weeks. Last month, gas prices hit their highest level since 2014, and the national average for a gallon of gas is now $3.41, according to AAA.

The role of crude oil production. Gas prices have gone up in part because of fluctuations in supply and demand. Demand for oil fell early in the pandemic, so oil-producing nations cut production. But over the past year, demand for oil recovered far faster than production was restored, driving prices up.

Additional factors at play. The price of crude oil is only one element driving up gas prices. Compliance with renewable-fuel standards can contribute to the cost, the price of ethanol has increased, and labor shortages in the trucking industry have made it more expensive to deliver gas.

A global energy crunch. Other types of fuels, including natural gas and coal, are also growing more expensive. Natural gas prices have shot up more than 150 percent in recent months, threatening to raise prices of food, chemicals, plastic goods and heat this winter.

The U.S. response. To combat soaring prices and their effects on inflation, President Biden ordered the release of oil from the nation’s emergency stockpile. He also asked the Federal Trade Commission to investigate possible “illegal conduct” by oil and gas companies.

“Russia is temporarily near its limits,” said Bhushan Bahree, an executive director at IHS Markit, a research firm.

Nigeria, Africa’s largest producer, in November pumped 360,000 barrels a day below its quota — almost enough on its own to wipe out the agreed 400,000-barrel-a-day monthly increase for the overall group. “A poor regulatory framework, sabotage and vandalization of oil facilities” are deterring needed spending in Nigeria, the International Energy Agency said in its report.

Angola, another African country, is also pumping well under its quota, while Libyan production has recently fallen off rapidly because of political turmoil.

Stanley Reed has been writing from London for The Times since 2012 on energy, the environment and the Middle East. Prior to that he was London bureau chief for BusinessWeek magazine. @stanleyreed12 

NYTimes 01 04 2022

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