June 2, 2021 | Investopaper
Organization of the Petroleum Exporting Countries (OPEC) and its affiliated oil-producing nations plan to produce an additional 2.1 million barrels per day. OPEC’s decision to increase production comes as demand for oil has increased from countries where the effects of the coronavirus epidemic have waned due to which the oil prices have risen.
OPEC has already announced that it will produce 2.1 million barrels of oil per day for the three months from May to July. OPEC will now produce an additional 350,000 barrels per day in June and 440,000 barrels per day in July. Saudi Arabia is re-considering to produce additional one million barrels per day. Previously, Saudi Arabia had agreed to cut production by 1 million barrels a day as a drop in global oil demand due to COVID.
Oil-producing nations had cut oil production in 2020 to stabilize oil prices due to covid. Now that the situation has improved, they are gradually moving toward increasing oil production.
World oil prices have risen sharply, hitting a two-year high on Tuesday. Energy demand has been rising in the United States, Europe and Asia since the middle of the year. US crude oil rose 2 percent to. 67.72 a barrel on Tuesday. Brent crude also rose 2.7 percent to. 71.17 a barrel. The price of Brent crude is at its highest level in two years. US crude oil prices has hit three-year high.
Oil prices have risen more than 30 percent since the beginning of the year.