Saudi Arabia, which cut its oil production by a million barrels daily this month and next to boost oil prices, has let it be known that will reverse those cuts at the beginning of April.
The decision follows oil’s price rise from $30 a barrel last summer to more than $60 now.
The kingdom will formally announce the hike in production when the OPEC oil cartel meets next month.
“We are in a much better place than we were a year ago,” Saudi energy minister Abdulaziz bin Salman said on 17 February in comments quoted by the Wall Street Journal, “but I must warn, once again, against complacency.”
“Uncertainty is very high and we have to be extremely cautious,” he noted, adding that the decision to increase production could be abandoned if market conditions shift.
U.S. oil inventories have dropped sharply recently, the American Petroleum Institute reported.
Rising demand in the second half of the year will erase the oil glut that was in place before the pandemic struck and lingered through much of 2020, the International Energy Agency predicted in its 11 February market report.
TRENDPOST: While rising oil prices are positive for oil-producing nations, it will hit oil-dependent nation’s economies, such as India’s, very hard, as it will consumers, thus deflating economic growth that will push inflation higher.
