AP

Caution from OPEC+ producers to keep oil prices high

Feb 2, 2022, 2:12 AM | Updated: Feb 3, 2022, 3:28 am

FRANKFURT, Germany (AP) — Oil cartel OPEC and allied producing countries are sticking with cautious increases in the amount of oil they send to the global economy, a decision likely to support prices that are near seven-year highs amid fears of a Russian military move against Ukraine.

The alliance of OPEC members led by Saudi Arabia and non-members led by Russia agreed Wednesday to add 400,000 barrels per day in March. That is in line with plans by the OPEC+ group to add that amount of oil every month and gradually restore deep cuts made during the depths of the coronavirus pandemic in 2020.

The move comes as oil prices hover near their highest levels since 2014, pushing up gasoline costs for drivers. U.S. oil traded up 1.2% at $89.28, while international benchmark Brent crude was priced at $90.09, up 1%.

Prices at those levels have led to pressure for more production from the U.S. and other consuming countries, which in November announced a coordinated release of oil from national reserves, a step that has not done much to curb the increase in prices as the economy bounces back from the pandemic and consumes more fuel for travel and industry.

OPEC+ sticking to its plan will support oil prices, especially since several members have been unable to meet their share of output. Higher oil prices are sending reverberations throughout the global economy in terms of higher consumer inflation in the U.S. and Europe and costlier fuel for heating, flying and driving.

U.S. drivers are paying an average of $3.36 per gallon for gasoline, up 8 cents from a month ago and 94 cents from a year ago, according to motor club federation AAA. In Germany, gasoline prices hit a record 1.71 euros per liter, the equivalent of $7.31 per gallon. Taxes make up a larger proportion of gas prices in Europe.

Recent price rises also have been fed by the tensions in eastern Europe, where uncertainty around Russia and Ukraine has raised fears that Russian oil supplies could be interrupted if diplomatic talks break down and U.S. and European sanctions materialize.

Russia is a major oil and gas producer. Some analysts think, however, that any sanctions imposed by the U.S. and Europe would seek to spare energy supplies.

Some OPEC member countries, such as Nigeria and Angola, have been unable to ramp up production due to lagging oil investment. That raises the question of whether countries that can produce more — such as de facto OPEC leader Saudi Arabia — can fill the gap.

OPEC+ has a stake in stable price developments: While higher prices benefit state budgets in producing countries, members may not want to see them shoot to levels over $100 per barrel, when they might begin to erode demand from transportation and industry.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Arizona and New York attorneys feud over extraditing suspect...

Associated Press

Why Alvin Bragg and Rachel Mitchell are fighting over extraditing suspect in New York hotel killing

Maricopa County Attorney Rachel Mitchell says she isn't into extraditing a suspect due to her lack of faith in Manhattan’s top prosecutor.

1 day ago

A Gila monster is displayed at the Woodland Park Zoo in Seattle, Dec. 14, 2018. A 34-year-old Color...

Associated Press

Colorado man dies after being bitten by pet Gila monster

A Colorado man has died after being bitten by his pet Gila monster in what would be a rare death by one of the desert lizards if the creature's venom turns out to have been the cause.

3 days ago

Police clear the area following a shooting at the Kansas City Chiefs NFL football Super Bowl celebr...

Associated Press

1 dead, many wounded after shooting at Kansas City Chiefs’ Super Bowl victory parade

One person died after 22 people were hit by gunfire in a shooting at the end of the Kansas Chiefs' Super Bowl victory celebration Wednesday.

10 days ago

This image from House Television shows House Speaker Mike Johnson of La., banging the gavel after h...

Associated Press

GOP-led House impeaches Homeland Security Secretary Mayorkas — by one vote — over border management

Having failed to impeach Homeland Security Secretary Alejandro Mayorkas the first time, House Republicans are determined to try again Tuesday.

11 days ago

Defense Secretary Lloyd Austin, right, and Kenya's Defense Minister Aden Duale, left, listen during...

Associated Press

Defense Secretary Lloyd Austin hospitalized with bladder issue

Defense Secretary Lloyd Austin has been hospitalized following symptoms pointing to an “emergent bladder issue."

12 days ago

Joel Osteen, the pastor of Lakewood Church, stands with his wife, Victoria Osteen, as he conducts a...

Associated Press

Woman firing rifle killed by 2 off-duty officers at Houston’s Lakewood Church run by Joel Osteen

A woman entered the Texas megachurch of Joel Osteen and started shooting with a rifle Sunday and was killed by two off-duty officers.

13 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

...

Fiesta Bowl Foundation

The 51st annual Vrbo Fiesta Bowl Parade is excitingly upon us

The 51st annual Vrbo Fiesta Bowl Parade presented by Lerner & Rowe is upon us! The attraction honors Arizona and the history of the game.

...

Sanderson Ford

The best ways to honor our heroes on Veterans Day and give back to the community

Veterans Day is fast approaching and there's no better way to support our veterans than to donate to the Military Assistance Mission.

Caution from OPEC+ producers to keep oil prices high