Oil prices continue to rise on Tuesday after jumping more than 2% the day before on the decision of OPEC+ states to maintain their earlier plan to increase oil production despite rising demand amid a sharp rise in the cost of natural gas.
Under this plan, OPEC+ countries will increase oil production in November by 400,000 barrels per day (bpd). Ahead of the meeting, informal meetings considered a more aggressive production increase of 800,000 bpd next month while maintaining the same plan for December.
The price of WTI futures for November reached by that time $77.72 per barrel on the electronic trades of the New York Mercantile Exchange (NYMEX), which was $0.1 (0.13%) above the final value of the previous session. The day before, those contracts rose $1.74 (2.3%) to $77.62 a barrel, the highest closing value since Nov. 11, 2014.
"After a sharp decline in oil production in the second quarter of 2020, OPEC+ countries have been very slow to increase production, with market demand likely to fully recover by 2022," notes Third Bridge analyst Peter McNally.
After OPEC+ has decided to increase production by only 400 thousand bpd per month, oil reserves in the world will continue to fall, the expert said.