OPEC+ Keeps Oil Production Unchanged, Maintains 2MMb/d Output Cut After Launch Of Russia Price Cap
Two weeks ago, oil tumbled after the WSJ reported a fake news hit piece quoting “delegates” who “said” that Saudi Arabia was preparing for a 500K oil production hike. We quickly countered that this was ridiculous and if anything OPEC+ would seek further production cuts, a view which other media promptly quickly picked up. In the end, the report of an output hike (which some interpreted as a gesture of good will from Saudi crown prince MBS who had just received immunity from the Biden regime), proved to be indeed fake news, but likewise any expectations of further output cuts were dashed when earlier on Sunday OPEC+ agreed to stick to its oil-output targets just two days after G-7 nations agreed to a $60 price cap on Russian oil, despite mounting concerns about oil demand as the world in swept up by a global recession and as new Covid-related lockdowns in China and lingering uncertainty over Russia’s ability to export crude have sent the price of oil sliding.
During a virtual meeting, OPEC+ decided to rollover the production cuts of 2 million barrels a day initially agreed to in October, a move which will allow the group time to assess the market impact of the price cap on Russian oil, the delegates said.
Brent crude plunged to its lowest level since September on Nov. 28, but ended up posting its biggest weekly gain in a month.
“With massive and offsetting fundamental and geopolitical risks bearing down on the oil market, ministers understandably opted to hold steady and hunker down,” said Bob McNally, president of Rapidan Energy Advisers LLC.
…click on the above link to read the rest…
