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.




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