OPEC+ withholds Oil Production to Maintain Price Recovery

The oil market did not expect Saudi Arabia’s and its OPEC+ allies’ decision to continue withholding its oil production levels.

The news came as a shock, oil prices went up and the global economy finds itself under additional inflationary pressure as it recovers from the global pandemic. Russia and Kazakhstan operating under an exemption they secured for themselves, will slightly increase their April output.

7 million barrels a day amounting to about 7% of global demand, will be held back from the market at a time when most countries’ economies are restarting, and fuel demand is on the rise.

Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman seems to be targeting an increase in sales and is confident that American producers will not be encouraged to increase their output in an attempt to steal market share.

If Riyadh is right in its expectations, OPEC+ will be able to boost prices and reclaim market share at a later stage with no market flooding interference by its U.S. rivals. If they have been wrong in their expectations, the result will be lower prices and an eventual lower production.

OPEC’s decision adds extra pressure on global economies and the already troubled by signs of an upcoming rising inflation, U.S. Federal Reserve and the EU Central Bank. Rising economies, coronavirus vaccines rollouts and stimulus packages are among some of the factors driving anticipation for an accelerating price growth. The expectations are counterbalanced by weak labor markets.

OPEC+ is scheduled to have a meeting again on April 1, 2021 where oil supply for May will be discussed. Watch Texas, Oklahoma and North Dakota oil suppliers’ moves closely as any increase in their production could affect the price of the black gold. Trade oil with your initial fund tripled when you claim the 200% Deposit Bonus by Traders Trust.