Oil Prices Stay High as Output From OPEC and Others Falls Behind - The New York Times - 0 views
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The sharp pullback came with an implicit promise that as factories reopened and planes returned to the air, the oil industry would revive, too, gradually scaling up production to help economies return to prepandemic health.
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Members of the cartel OPEC Plus, which agreed to cut output by about 10 million barrels a day in early 2020, are routinely falling well short of their rising monthly production targets.
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Production in the United States, the world’s largest oil producer, has also been slow to recover from its one-million-barrel-a-day plummet in 2020, as companies and investors are wary of committing money amid climate change concerns and volatile prices.
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A prolonged period when more oil has been consumed than pumped has drained tank farms to low levels. Investment in new drilling for new oil has also fallen to multiyear lows, though it is expected to pick up this year. At the same time, demand is expected to grow strongly, reaching prepandemic levels this year.
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Energy Aspects forecasts that the deficit will reach just over one million barrels a day this month, or 1 percent of world supplies, and will probably increase later in the year.
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A variety of factors are causing production in some countries to fall short, including political turmoil, outmoded regulatory regimes and pressures on international oil companies to rethink their investments so as to bolster profits and reduce carbon emissions. That shift could leave developing countries that depend on oil income out in the cold.
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Nigeria’s industry is plagued by damage to infrastructure caused by oil thieves and others, problems that have worsened in recent months, according to the industry.
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Kamel al-Harami, a Kuwaiti analyst, said that the domestic industry “does not have the experience and the expertise to deal with old and aged oil fields” but that public opinion is resistant to bringing in international companies.
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Following a schedule agreed to in July, the group plans to raise the overall output by 400,000 barrels a day each month, even though they are missing the targets.
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Analysts say Saudi officials don’t want to unilaterally increase output and risk busting up the arrangement with other producers that gives them so much control.