The Eurogroup tries to negotiate a common electricity policy in the face of soaring prices: the energy crisis is spreading

Oil rises after OPEC summit, raising tensions in energy markets

photo_camera REUTERS/DADO RUVIC - OPEC

The decision taken on Monday by the Organisation of Petroleum Exporting Countries and its partners, which are led by Russia (OPEC+), not to modify the plans already approved has resulted in a new rise in the price of black gold. This has been a challenge in the face of requests from major consumers, such as the United States, to increase production further in order to avoid inflationary pressures.

Brent (the benchmark in Europe) has accelerated its race to consolidate at 80 dollars a barrel. It traded at 82 dollars hours after the meeting of the exporting countries (up 57% in 2021). Meanwhile, US WTI crude oil hit 77 dollars, the highest price in seven years. This Tuesday, the futures of this energy commodity rose again, albeit more moderately.

OPEC+ signed a pact in July based on an increase in the pumping of crude oil by 400,000 barrels per day in November, with the goal of recovering the 5.8 million barrels that were cut by the pandemic. Doubts before yesterday's agreement were that exporters would opt for a larger increase, albeit a one-off one in November for which there was speculation that it could reach 800,000 barrels.

Reunión de los ministros de la alianza OPEP+

But this was not the case. And the decision by the 23-member alliance comes at a time of heightened tensions in the energy markets, with oil, natural gas and coal all rising. As a result of higher electricity prices, the costs of industrial production, food and other goods are soaring. The economic recovery, which includes the return to normality in the transport of people and goods, is behind the choice of producer-exporters not to return the barrels they have withdrawn from circulation. A cut of 9.7 million barrels was agreed in 2020 to mitigate the effects of the pandemic.

Energy has become a key issue in a complex geopolitical environment. Yesterday the eurozone's finance ministers (the Eurogroup) discussed negotiating a common electricity policy: wholesale prices have soared in almost all countries as a result of high gas prices and CO2 emission allowances.

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