Oil Steadies Near $76 Ahead of OPEC+ Meeting on Supply Policy

Bloomberg2022-01-04
  • Alliance expected to agree to production increase for February
  • OPEC+ committee cuts estimates for surplus in first quarter

Oil steadied in Asian trading before an OPEC+ meeting that’s expected to see the alliance agree to another production boost next month.

Futures in New York held near $76 a barrel after rising 1.2% Monday. The OPEC+ alliance is poised to ratify a 400,000-barrel a day output increase for February when it gathers later Tuesday, according to a Bloomberg survey. The group will add more supply despite some concerns about demand following Covid-19 flare-ups across the world including in China, the biggest crude importer.

The supply-demand backdrop is looking better for OPEC+, with the cartel cutting estimates for a surplus expected in the first quarter due to weaker output growth from its rivals. Oil’s market structure has also firmed in a bullish backwardation pattern, even as the omicron strain of the virus turbocharges infection rates across the world.

The OPEC+ Joint Technical Committee, which analyzes the market on behalf of ministers, sees a surplus of 1.4 million barrels a day in the first three months of 2022, about 25% less than it estimated a month ago, according to a report seen by Bloomberg.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

Leave a comment
4