[이코노믹리뷰=박민규 기자] International oil prices surged more than 4%, drawing the steepest upward curve in two years, as a result of OPEC+ (Oil Exporting Countries Organization and 10 major oil producing countries) freezing oil production’surprise’.
The US West Texas crude oil (WTI) for April delivery on the 4th (local time) ended at 63.83 dollars, up 4.2% (2.55 dollars) compared to the battlefield. It is the largest increase in about 1 year and 10 months since the end of April 2019. Brent oil in May in the North Sea region of the UK jumped 4.2% ($2.67) and settled at $66.74.
According to Reuters on the same day, OPEC+ decided to hold a video conference to keep the current crude oil production cutoff until next month without increasing oil production. However, Russia and Kazakhstan were allowed to increase production of 130,000 barrels and 20,000 barrels of crude oil on average per day, respectively.
Saudi Arabia’s Minister of Energy Abdulaziz bin Salman, who leads OPEC+, said, “(Excluding Russia and Kazakhstan), we will freeze the oil production of OPEC+ member states at the current level.”
In addition, Saudi Arabia decided to continue to cut production of an average of 1 million barrels per day of crude oil, which has been voluntarily carried out since last month, into April. Saudi Energy Minister Bin Salman said, “Saudi has decided to gradually reduce production of 1 million barrels of crude oil per day over the next few months.” It is explained that it will decide to increase crude oil production according to time and convenience, but it will not be in a hurry.
This is a very different result than expected. In the crude oil market, the forecast that OPEC+ will increase production of 500,000 barrels of crude oil per day from April of this year and Saudi Arabia will withdraw additional crude oil cuts, Reuters reported on the same day.
Eyes are drawn to the background of OPEC+’s’temptation to increase production’.
According to CNBC, a US media outlet, Saudi Arabia is known to have asked other oil producing countries to be “very cautious” before the OPEC+ meeting. This is because there is a risk that the oil price, which has recovered to the level before the spread of Corona 19, will collapse in an instant if the market is reassuring the trend of improving and expanding the production volume.
In fact, there are many views of the recent oil price rally as a phenomenon driven by speculative demand rather than crude oil demand. It also suggests that China, the world’s largest oil importer, had its plant utilization rate at its lowest level in about nine months in February, suggesting that demand for crude oil from China has declined.
On the other hand, it is analyzed that the unrest in the financial market as a whole caused by the surge in US Treasury yields is a factor that limits the rise in oil prices.
Amid rising concerns over a sharp rise in interest rates, Jerome Powell, chairman of the Federal Reserve, commented on this, but did not suggest the Fed’s response.
As a result, market disappointment was expressed, the stock market hesitated, and interest rates on 10-year U.S. Treasury bonds once exceeded 1.55%. The 10-year U.S. Treasury bond rate was 0.92% until the beginning of this year, but recently, it has been on the rise every day.