Saudi Arabia and the United Arab Emirates (UAE) could help reduce oil market volatility if they increase production, a report from the International Energy Agency (IEA) said, CNBC reported.
Although OPEC+ has been raising total quotas by 400,000 barrels per day (bpd) every month since 2021, in December commercial oil reserves of countries that are members of the Organization for Economic Cooperation and Development (OECD) decreased by 60 million barrels, to 2.68 billion barrels, which is the lowest level in seven years.
This amount is 255 million barrels below the five-year average, since in 12 months, inventories fell by 355 million barrels, despite interventions of 50 million barrels from the strategic reserve.
At this level, reserves covered the oil needs of OECD countries for almost 60 days. Preliminary data for January show that inventories fell another 13.5 million barrels.
According to the report, Saudi Arabia and the UAE are the only members of the OPEC+ agreement that have enough spare production capacity to increase production and replenish dwindling oil reserves.
Reuters notes that after the report’s publication, futures for Brent oil reached a session high, stopping at $92.08.
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