Increase in Kuwaiti Oil Price

Kuwait oil gained 56 cents during Monday’s trading to reach US$61.95 per barrel (pb) compared with US$61.39 pb last Friday, Kuwait Petroleum Corporation (KPC) said yesterday. Benchmark Brent crude closed at US$65.24 pb after rising by US$2.33, and West Texas Intermediate increased by US$2.44 to US$61.70 pb. The OPEC daily basket price of 13 crudes went up by 70 cents to US$62 pb on Monday, compared with US$61.30 last Friday, said the OPEC Secretariat yesterday.

OPEC annual price in 2020 was US$41.47 pb. However, the prices of other standard crudes increased due to the slow resumption of US crude production after it was reduced by freezing weather conditions, while demand recovered from its low levels during the COVID-19 pandemic.

Market traders indicate that American producers need at least two weeks to resume production of more than two million barrels per day (bpd) of crude, due to cold weather, as recovery is slowed by frozen pipelines and power cuts. Prices were also boosted by expectations of investment bank Goldman Sachs that oil would reach US$70 in Q2 and US$75 in Q3.

The countries of the OPEC alliance agreed on January 5 to curb the high production and to deal with caution with regard to production levels by gradually returning 2 million bpd to the market, with the speed being determined according to market conditions and developments.

OPEC Secretariat said in its periodic report for the current month of February that the demand for OPEC crude in 2021 will reach 27.5 million bpd, about 5 million bpd more compared to 2020. OPEC Plus will hold its 14th ministerial meeting on March 4, to assess the developments in the global oil market and take a decision in proportion to the expected demand for crude and the speed of the global economic recovery.

The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).