OPEC 'Focuses' on US Crude Oil Inventory Decline... WTI Temporarily Rises to $74 per Barrel

OPEC Plus Production Increase Meeting Delayed by One Day
EIA Reports US Crude Oil Inventory Drop of 6.7 Million Barrels
Exceeds Initial Estimate of 4.69 Million Barrels
Overseas Countries Including India Anticipate Production Increase

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cha Min-young] The 'OPEC Plus,' led by member countries of the Organization of the Petroleum Exporting Countries (OPEC) and allied nations, has postponed its meeting by one day to decide on the direction of production increases, while international oil prices continue to strengthen. West Texas Intermediate (WTI) crude oil hit a new high, surpassing $74 per barrel at one point during the session, as the decline in U.S. crude oil inventories exceeded experts' expectations.

As of 11:27 a.m. local time on the 30th, the August WTI contract was trading at $73.20 per barrel on the New York Mercantile Exchange (NYMEX), up 0.30% from the previous trading day. Early in the session, prices rose to as high as $74.14, marking a recent peak. Compared to the early-year price in the low $50 range, this represents an increase of more than $20. At the same time, the September Brent crude contract was trading at $74.50 per barrel, up 0.30%.

OPEC Plus postponed its meeting to the 1st (local time) to narrow differences among member countries. Bloomberg reported that "the largest gap is between the top oil producers, Saudi Arabia and Russia." Russia advocates for a policy of increasing production, while Saudi Arabia is known to prefer a gradual production increase.

The market views an increase in production as likely. Bloomberg cited an investment note from analysts at Standard Chartered, stating, "OPEC Plus currently faces a choice between stabilizing prices through profits or raising prices further, which could provoke consumer anger."

Due to the rapid surge in oil demand following the global economic recovery, oil inventories continue to decline. On the 30th (local time), the U.S. Energy Information Administration (EIA) reported a decrease of about 6.7 million barrels in crude oil inventories. This significantly exceeds the expert forecast of 4.69 million barrels. The previous week also saw a reduction of 7.6 million barrels.

India has also requested OPEC Plus to increase production. OilPrice.com explained, "India, the world's third-largest oil consumer and a major importer, depends on foreign oil for more than 80% of its oil consumption."

However, a strong variable remains the COVID-19 variant virus pandemic. The delta variant originating from India was referred to as a "wild card" by OPEC Secretary-General Mohammad Barkindo.

This content was produced with the assistance of AI translation services.