Vienna, Austria–A committee of major oil producers recommended Wednesday to maintain the cartel’s current reduced output strategy, as the global economic outlook remains uncertain and the war in Ukraine drags on.
The 13 members of the Organization of the Petroleum Exporting Countries (OPEC) led by Riyadh and their 10 allies led by Moscow agreed last October to reduce output by two million barrels per day until the end of this year.
Collectively known as OPEC+, the group said at the time the move — the biggest cut since the height of the Covid pandemic in 2020 — was due to “market considerations”, but the US denounced it as a concession to Moscow.
Oil prices spiked following Russia’s invasion of Ukraine in February 2022.
In a virtual meeting on Wednesday, the group’s Joint Ministerial Monitoring Committee (JMMC) “reaffirmed their commitment” to the strategy of a production cut.
The JMMC has no decision-making power but discusses market conditions and makes recommendations, which are then formally discussed and decided at the organisation’s ministerial meetings.
Analysts have been widely anticipating a continuation of the status quo.
Craig Erlam, senior market analyst at trading platform OANDA, noting the “uncertainty around the global economic outlook also likely clouding their forecasts for demand.”
Investors are eyeing an increase in demand after China, the world’s largest importer of crude oil, lifted its “zero Covid” policy.
American West Texas Intermediate (WTI) currently hovers around $80 a barrel and Brent North Sea crude around $85 — far from their peaks of more than $130 dollars reached in March after Russia invaded Ukraine.
The next JMMC meeting is set for April 3, according to a statement from the group. The group’s next ministerial meeting is scheduled for June 4.