Oil prices rise as Opec prepares to set new output targets

theguardian.com:

Oil prices have risen before Thursday’s meeting of the Opec cartel of oil-producing nations, as ministers prepare to set output targets for July in their first gathering since the EU imposed sanctions on Russian crude.

Opec is under pressure from some members to exclude Russia, the world’s third largest oil producer, from future quotas, in a move that could pave the way for Saudi Arabia and the United Arab Emirates to pump more oil.

The price of futures for Brent crude oil, the North Sea benchmark, rose by 2% at one point on Wednesday to $117 a barrel. Its North American counterpart, West Texas Intermediate, rose by a similar amount to just shy of $116 a barrel. Prices had fallen back from highs of over $125 earlier in the week, but bounced again as investors weighed how far production could be increased to counter the effect of sanctions.

Ministers representing Opec’s 13 members and 10 non-Opec producers led by Russia, a grouping called Opec+, are due to meet via video conference on Thursday. They are expected to approve a July increase of 432,000 barrels a day, in the latest of a series of monthly increases announced in September 2021.

Russia is now lagging the group, with its output expected to drop 8% this year. The Wall Street Journal reported on Tuesday evening that Russia’s falling production had prompted some nations, including members from Gulf states, to suggest excluding Russia from production targets, allowing other members to increase their output.

Demand for oil and energy prices have surged over the past year as major economies reopen from pandemic lockdowns, compounded by the fallout from Russia’s invasion of Ukraine. Rapid price swings have contributed to inflationary pressures and cost of living crises