Oil Surges After OPEC+ Shuns Biden, Proposes ‘Output Hike For Ants’

Oil prices are spiking this morning after OPEC+ agreed on a modest 100k barrel/day increase in output for September – considerably less than the 300-400k increase expected by many (and hoped for by President Biden).

Itty bitty OPEC+ hike. https://t.co/Ti9PZF3GFf pic.twitter.com/Ar7DJvgsxj

— Rory Johnston (@Rory_Johnston) August 3, 2022

This is the smallest increase in output in OPEC history, and couldn’t get smaller without being a cut.

WTI is back above $95 on the news (and Brent is back above $100)…

As Bloomberg’s Javier Blas satirically commented:

“At the current rate, I fear that President Joe Biden consumed more jet-fuel travelling on Air Force One to Jeddah than any extra oil barrels OPEC+ may agree to provide to the market in September.”

OPEC+ has already agreed to return all the supply that it took offline to meet the challenge posed by the pandemic, although several members have struggled to deliver quotas in full, and even Saudi Arabia likely has little in the way of significant spare capacity left to deploy.

CHART OF THE DAY: For the 3rd time only in history, Saudi Arabia oil production is rising above 11m b/d from today (OPEC+ quota for Riyadh for August is exactly 11.004m b/d)

For more on Saudi oil output, take a look at his @opinion column from late June: https://t.co/NKj7H389NE pic.twitter.com/F5T6Kg81id

— Javier Blas (@JavierBlas) August 1, 2022

Pump prices are set to rise as oil and wholesale gasoline prices have decoupled…

Time for another expensive trip to the Middle East?