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Sunday, June 2, 2024

US wants hike in global crude output, including from OPEC: Official

OPEC+ decided in early October to cut production by two million barrels per day and has not changed its output level since.

The United States wants to see a hike in oil production, including from OPEC countries, said a senior State Department official Monday.

“As world economies recover, we’ll see more consumption. And therefore we’d like to see supply meet demand,” said Jose Fernandez, the US Undersecretary of State for Economic Affairs, Energy and the Environment, on the sidelines of the CERAWeek energy conference, in Houston, Texas.

Read more: OPEC views world oil demand will rise for another decade

“We would like to see more supply” of crude globally, including from OPEC+ — the 13 members of the Organization of Petroleum Exporting Countries and 11 non-OPEC allied countries — Fernandez said.

OPEC+ decided in early October to cut production by two million barrels per day and has not changed its output level since.

The price of a barrel of West Texas Intermediate (WTI), the benchmark US variety, is now worth about a third less than a year ago, in the early days of the Russian invasion of Ukraine.

But it is still more than 40 percent higher than during the same period in 2019, and up almost 30 percent compared to 2018.

Between the beginning of September 2021 and the beginning of January 2023, the administration of President Joe Biden drew nearly 250 million barrels from the US strategic reserves, which was then sold on the US market to relieve skyrocketing gas prices.

Read more: Biden disappointed with decision of OPEC+ to cut production

The US president has regularly called in the last year for an increase in the OPEC+ output, but the cartel has not raised its quotas for six months.

In February, the organization’s crude production, as estimated by Reuters, was nearly two million barrels per day lower than in February 2019.

OPEC forecasts a rise in demand of 2.32 million barrels per day in 2023 compared to last year.