OPEC+ keeps cautious oil production despite Biden pressure

Frankfurt:  OPEC and allied oil-producing countries rebuffed pressure from US President Joe Biden to pump significantly more oil and lower gasoline prices for US drivers, deciding Thursday to stick with their plan for cautious monthly increases even as prices surge and the global economy is thirsty for fuel.
The OPEC+ alliance, made up of OPEC members led by the Saudis and non-members led by Russia, approved an increase in production of 400,000 barrels per day for the month of December.
That is in line with the group’s road map to add that amount of oil to the market every month into next year. The plan is to open the petroleum taps bit by bit until deep production cuts made during the coronavirus pandemic are restored – even as prices have surged to seven-year highs.
That hasn’t gone down well with Biden, who has made repeated calls to pump more oil. The US used the Group of 20 summit last weekend in Rome to consult with other oil-consuming countries on how to exert influence over the producing countries and what they might do if the Saudis and Russians continue to hold back.
The caution from OPEC+ means higher prices worldwide and more revenue for producing countries. Slower increases also mean less risk of increasing production too fast and sending prices suddenly lower as the group braces for the possibility of more economic turbulence from COVID-19 outbreaks this winter or from supply chain backups, labor shortages and rising consumer prices that have threatened the global recovery.
Extremely high natural gas prices – part of a global fossil fuel crunch – have helped push up oil prices as power generators in Asia switch from gas to oil.