Oil market shrugs off Opec+ output hike decision

Oil market shrugs off Opec+ output hike decision

London, 2 December (Argus) — Oil prices have ticked higher today despite the Opec+ group's decision to press ahead with a 400,000 b/d crude production increase in January.

The Ice Brent futures contract with February delivery was trading at $69.61/bl at 17:53 GMT, up by 74¢/bl from yesterday's settlement. The front-month February Nymex WTI contract was changing hands at $66.45/bl, adding 88¢/bl from yesterday's close.

Prices picked up after initially sliding on the news that Opec+ is going ahead with a 400,000 b/d hike to its collective quota in January. Concerns surrounding the potentially more transmissible Covid-19 Omicron variant and an upcoming strategic petroleum reserve (SPR) release by key crude buyers had raised expectations that the group might deviate from its previously agreed roadmap to raise output each month until all of last year's cuts are unwound. But despite its own forecasts pointing to a sizeable stockbuild in the first quarter of next year, the group has decided against changing course.