There was no surprise at Sunday’s OPEC+ meeting as the group left production quotas unchanged, as was expected. Hints at the decision were dropped to various news services last week so the announcement doesn’t come as a surprise, though some had held out hope for a cut.
In October OPEC+ lowered production quotas by 2 million barrels per day and those levels will remain going forward.
Interestingly, OPEC+ didn’t schedule its next full meeting until June 4, 2023. At the same time, the release emphasizes that meetings could be called at any time if necessary. A reporters report said there will be a monitoring meeting on Feb 1.
OPEC+ is likely to closely watch what happens to Russia oil exports in the coming months. The G7 $60 price cap of Russia oil goes into effect on Monday. Today Russia said it will cut off supply to the EU and has vowed not to sell crude to anyone participating in the scheme.
Another factor oil market participants are watching is China’s reopening. Signs of an easing of covid-zero are abundant and that will eventually lead to rising demand.
WTI crude oil closed on Friday at $79.98 and Brent finished at $85.57. I wouldn’t expect any fireworks at the open based on this but anything is possible in the oil market.