OPEC + agreed to increase oil production

OPEC + agreed to increase oil production starting May 2021, but only to a limited extent.

In a statement after their April 1 meeting, ministers emphasized that the market has improved thanks to the COVID-19 vaccination programs deployed globally and the stimulus packages in many key economies. . However, OPEC + also said that it will continue to cautiously monitor the market movements after signs of volatility in recent weeks.

According to the Kazakh Energy Ministry, at the meeting, the OPEC + countries agreed to increase their production by 350,000 barrels / day in May, by 350,000 barrels / day in June, and by 450,000 barrels / day in July. At present, OPEC + is imposing an output limit of 8.2 million barrels per day, of which 1 million barrels per day is the voluntary output cut of Saudi Arabia.

Also at the meeting, Russian Deputy Prime Minister Alexander Novak predicted that world oil demand would increase by about 5-5.5 million barrels / day in 2021. Mr. Novak hopes that global oil reserves will return to the level. normally in the next 2 to 3 months. However, Saudi Energy Minister Abdulaziz bin Salman thinks the market will take a long time to recover. Salman emphasized that the decision can still be changed during the monthly meetings of the group and until there is clear evidence of the economic recovery, OPEC + will maintain a cautious stance.

Earlier this month, the International Energy Agency (IEA) released a more pessimistic forecast for the oil market, which predicted it would take another two years for global demand to recover to levels. as before the COVID-19 pandemic.

The news that OPEC + had reached an agreement to increase production in May 2021 surprised some investors as the majority of analysts previously believed that the alliance would keep an output limit in May, due to the development. The prospect of oil demand recovery is weakening due to the new Covid-19 pandemic wave in Europe.

The OPEC + deal has helped support oil prices. World oil prices rose more than 2 USD in the session on April 1. At the end of the session, North Sea Brent oil price increased by 2.12 USD (3.4%) to 64.86 USD / barrel. The US price of light sweet crude oil (WTI) increased by 2.29 USD (3.9%) to 61.45 USD / barrel.

The oil market is also renewed after US President Joe Biden launched a plan to spend $ 2,300 billion to invest in infrastructure projects such as bridges and roads, along with addressing climate change.

On the same day, in the first trading session of the month, the S&P 500 composite index of the Wall Street stock market (USA) closed above 4,000 points for the first time, reaching a new record thanks to the push from Microsoft stocks. , Amazon and Alphabet, as well as optimism about the US economy on the rise.

This session, shares of Microsoft, Amazon, Alphabet and Nvidia all rose from 2% or more, notably shares of Alphabet, the parent company of Google with a 3.3% increase and closed at high levels. most ever.

With signs of such economic recovery, the Dow Jones industrial index rose 0.52% to 33,153.21 points, while the S&P 500 index added 1.18% to 4,019.87 points. The Nasdaq Composite Technology Index rose 1.76% and closed at 13,480.11 points.

Thus, the S&P 500 has risen about 7% in 2021 and is up 80% from the lows recorded in March 2020.

The US stock market will be closed for a public holiday on April 2. For the whole trading week, the S&P 500 rose 1.1%, the Dow Jones rose 0.25% and the Nasdaq added 2.6%.