OPEC+ Expected to Stick to Planned March Output Target Increase

OPEC+ Expected to Stick to Planned March Output Target Increase

OPEC+ will probably stick with a planned increase in its oil output target for March when it meets on Wednesday next week, several sources from the producer group said, as it sees demand recovering despite downside risks from the pandemic and looming interest rate rises.

While two sources from the Organization of the Petroleum Exporting Countries, Russia and allies, known as OPEC+, said oil at a seven-year high close to $90 a barrel might prompt the group to consider further steps, the vast majority of sources said no new decision was expected at the Feb. 2 online meeting, Reuters reported.

One Russian source told Reuters the country was concerned the price rally might revive a boom in the United States shale production.

OPEC+ has raised its output target each month since August by 400,000 barrels per day (bpd) as it unwinds record production cuts made in 2020.

Current plans would see OPEC+ do so again in March.

OPEC+ has resisted pressure from the United States since last year to raise supplies more quickly.

Despite its increased targets, actual output from OPEC+ has not kept pace as some members struggle with capacity constraints, and this has been a factor underpinning prices.

OPEC+ missed its production target by 790,000