Oil Futures Fall after OPEC+ Sticks to Output Increase
12/02 9:18 AM
Oil Futures Fall after OPEC+ Sticks to Output Increase WASHINGTON, D.C. (DTN) -- Nearby delivery month West Texas Intermediate futures and Brent crude traded on the Intercontinental Exchange weakened in midmorning trade Thursday after Organization of the Petroleum Exporting Countries and Russia-led partners agreed on a 400,000 bpd production increase next month, disappointing expectations for the alliance to keep the output quota unchanged. The decision to increase production came despite growing fears over a winter surge in COVID infections and projections of an oversupplied oil market. Ahead of the meeting, OPEC+ technical panel estimated a global oil market supply surplus would reach 2 million bpd in January, widening further to 3.4 million bpd in February. In March, OPEC+ expects the surplus to reach a whopping 3.8 million bpd. OPEC+ is gradually unwinding a record 9.7 million bpd production cut put in place at the beginning of the pandemic in April 2020 through monthly installments of 400,000 bpd. The 23-producer alliance is currently withholding around 3.8 million bpd of crude from the global oil market, with some key members reportedly struggling to raise production in line with agreed to quotas. OPEC+ will hold next Ministerial Meeting on Jan. 4, 2022. Following the OPEC+ news release, NYMEX January West Texas Intermediate contact softened $0.32 to $65.16 bbl, and international benchmark Brent for February delivery declined $0.40 to $68.55 bbl. Liubov Georges, 1.646.359.4088, liubov.georges@dtn.com, http://www.dtn.com. (c) Copyright 2021 DTN, LLC. All rights reserved.
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