OPEC and its allies agreed on Thursday to go ahead with its existing policy to gradually raise their crude oil production by 400,000 bpd each month. The move came despite concerns that a US strategic petroleum reserve (SPR) release and the new coronavirus Omicron variant would depress prices. Benchmark Brent crude futures settled over $1 lower after the deal was reported but then recovered some ground to trade around $70 per barrel. Brent is now lower than its three-year highs of more than $86 seen in October but still up more than 30% year to date.
Reuters reported that OPEC+ considered several options on Thursday, including halting their January proposed hike or raising output by less than the monthly plan. However, such a move would have put the group on a collision course with the US, which has been pushing for more supply amid soaring fuel prices. Saudi Arabia and Russia have previously said that there’s no need to hastily adjust the current production plan.
The report said that OPEC+ is now also watching the market closely to assess the real impact of Omicron. OPEC+ ministers are due to meet again on January 4, but the group indicated that they could meet on a sooner date if the market situation demanded.
