Oil market clouded with uncertainty
During its most recent monthly meeting on March 2, OPEC cited a “well-balanced market” in making the decision to maintain a production plan approved in April 2020 and reaffirmed in July 2021, according to an OPEC news release.
The news release on the OPEC website also noted, “That current volatility is not caused by changes in market fundamentals but by current geographical developments.”
OPEC reaffirming its decision will adjust the monthly overall production by 400,000 barrels per day for April 2022.
One day later (March 3), Brent crude oil was $114 per barrel, while West Texas Intermediate crude oil was $111 per barrel as of 11:30 a.m. CST, according to oilprice.com.
A Reuters report detailed oil costs not seen since May 2012, including a Brent crude price of $119.84 per barrel.
So far, sanctions imposed on Russia over its invasion of Ukraine have yet to target oil and gas exports with the exception of a ban on the export of specific refining technologies, said the Reuters report.
A proposed deal between the United States and Iran would increase production by more than 1 million barrels per day of oil, Reuters reported.
Consumer projections
The Annual Energy Outlook 2022, released by the Energy Information Administration on March 3, projected U.S. energy consumption to increase significantly due to economic growth through 2050.
Petroleum is expected to remain among the most consumed energy sources, but renewable energy will be the fastest-growing, said the EIA outlook.
Additionally, U.S. crude oil production, partly driven by global demand, is predicted to reach record highs.
The full EIA report can be found here.
The next OPEC and non-OPEC ministerial meeting is scheduled for March 31. LL