On Wednesday, the Organization of the Petroleum Exporting Countries (OPEC) oil producer’s cartel and allied non-member countries led by Russia signed off on gradually increasing production. The global economy’s demands for fuel continue to recover from the worst of the coronavirus pandemic.
The US pressured the OPEC group to move faster in restoring the production which was cut during the pandemic. The US asked them to potentially ease costs at the pump for American drivers. OPEC+ agreed via online meeting to follow the earlier plan to produce 4,00,000 barrels per day from October 1. The cartel and its allies are diligently trying to restore deep cuts from 2020’s lockdown which lessen the demand for fuel amid travel restriction.
The price of oil slipped to 0.4% at $68.26 per barrel on the New York Mercantile Exchange and crude oil traded down 0.4% at $71.36 per barrel which was an international benchmark. However, the recovery was seen with a slump to just above $62 for New York Mercantile Exchange crude on August 20.
An increase in supply of oil can cause a slip in price as it did in August while holding back the production can cost members money for their budgets.