OPEC+ maintains 2m bpd production output

The Organisation of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have agreed to maintain the current two million barrel per day production output after the Group of Seven (G7) nations agreed to a price cap on Russian oil.

But before the meeting, the Brent crude futures had fallen to $85.4 per barrel on the last trading day for last week.

At its previous meeting in October, OPEC+ agreed to cut production by 2 million barrels per day (bpd) from the market despite calls by the United States for more output.

The 13-member alliance said it upheld the decision “which was purely driven by market considerations and recognised in retrospect by the market participants to have been the necessary and the right course of action towards stabilising global oil markets”.

OPEC+ said its decision was also in adherence to the approach of being proactive and preemptive.

This was against expectation by some speculators that major oil producers could cut output further, expecting that ye cartel would tick to its latest target of reducing oil production by two million barrels per day.

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Meanwhile, the latest data from Baker Hughes showed US oil rig count, an indicator of future production remained unchanged last week.

Poland agreed to the EU’s deal for a $60 per barrel price cap on Russian seaborne oil, allowing the bloc to move forward with formally approving the deal over the weekend.

For the week, oil rose about five per cent, the first weekly gain since early November, benefiting mainly from China’s softening stance on Covid that sparked hopes for a rebound in demand from the world’s top crude importer.