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OPEC+ To Ratify Hike But Misses Production Targets Again

ENERGY

As oil breaks USD$90/bbl for the first time since 2014 OPEC+ is expected to ratify another production hike next week. The increase is expected to be in line with previous monthly hikes of 400,000 barrels a day.

  • Global oil supply is squeezed and despite production hikes OPEC+ is consistently failing to meet production targets. Last month the group produced two-thirds of the proposed increase with Nigeria, Angola and Russia all coming up short.
  • Missed production targets have been blamed on the ongoing military crisis in Ukraine and a lack of investment in downstream oil production.
  • Saudi Arabia and the United Arab Emirates have the capacity to increase output to cover faltering OPEC states but have not indicated a willingness to do so.
  • This week the US Department of Energy approved the release of 13.4 million barrels of crude oil from the Strategic Petroleum Reserve in an effort to help control oil prices.

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