OIL prices have unexpectedly surged, surprising the market by reaching $78 per barrel, with indications of further increases. The unity within OPEC+ seems strong as they adhere closely to their production quotas. Russia has finally stepped forward to reduce its production, aiming for nine million barrels per day by the month’s end.

The oil organization seems to have started realizing its effectiveness in adhering strictly to its established quota, with the hope of easing the production quota with the tightening of oil markets, potentially pushing oil prices to $90 per barrel or even higher. The discipline displayed by OPEC+ in fully adhering to their agreed quota is finally yielding more US dollars per barrel, thereby achieving the objectives of the oil organization through patience. The recent announcement by Russia about reducing its production to nine million barrels per day has further boosted oil prices, with the full support of the Russian government, which requested its oil companies to comply, despite producing over 9.5 million barrels per day at the end of February.

Now it seems all factors are contributing to firmer oil prices across the board, not just for specific petroleum products. The recent attacks on three Russian refineries have exacerbated the tightening of petroleum product markets, with one refinery operating at only 50% capacity, leading to shortages in some parts of Europe. Despite the current surge in crude oil production in the USA, Brazil, and Canada, with the USA leading at 13 million barrels, there are no signs of reductions in oil prices. Producers are pushing further, despite unprecedented price environments. Almost all producers are targeting increased production, expecting demand to reach about 104.5 million barrels per day this year. The future outlook is even more positive, with expectations of reaching around 120 million barrels in the next 20 years, which is certainly good news for fossil fuels.

Almost all producers are targeting more with the expectation that demand will reach about 104.5 million barrels per day this year. The future looks more positive, with expectations of reaching around 120 million barrels in the next 20 years. This certainly is good news for fossil fuels. With such positive factors driving the oil market, it is no wonder that our crude oil prices are expected to surge above $90 a barrel. However, the implications for the US presidential election remain to be seen.

 

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