OPEC+ keeps policy steady amid faltering economy, Russian oil curbs

  • No discussions about the Russian price ceiling – representatives
  • Oil prices are under pressure from a weak economy
  • The next meetings will be held on February 1 and June 3-4

LONDON/DUBAI, Dec 4 (Reuters) – OPEC+ agreed to stick to its oil production targets at a meeting on Sunday, as oil markets struggled to assess the impact of the G7 price ceiling on demand and supply from China’s economy. .

The decision comes two days after the Group of Seven (G7) countries agreed to a price cap on Russian oil.

OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, agreed in October to cut global production by 2% by 2 million barrels (bpd), angering the US and other Western nations. Needed from November to end of 2023.

Washington has accused the group and one of its leaders, Saudi Arabia, of siding with Russia despite Moscow’s war in Ukraine.

OPEC+ has argued that it cut production due to a weak economic outlook. Oil prices have fallen since October due to slower Chinese and global growth and higher interest rates, fueling market speculation that the group may cut output again.

But on Sunday the Oil Producers’ Group decided to keep the policy unchanged. Its chief ministers next Feb. They will meet the Monitoring Committee on June 1, while a full meeting is scheduled for June 3-4.

On Friday, G7 countries and Australia agreed to a $60-a-barrel price ceiling on Russian seaborne crude. It was a move that would cut off the flow of Russian oil to global markets and deprive President Vladimir Putin of revenue.

Moscow has said it will not sell its oil under the cap and is studying how to respond.

Many analysts and OPEC ministers have called the price ceiling confusing and ineffective, as Moscow sells much of its oil to countries such as China and India, which have refused to condemn the war in Ukraine.

Neither the OPEC meeting on Saturday nor the OPEC+ meeting on Sunday discussed the Russian price cap, the sources said.

Russian Deputy Prime Minister Alexander Novak said on Sunday that he would cut output rather than supply oil under the price cap, and said the cap could hurt other producers.

Sources told Reuters several OPEC+ members expressed frustration that anti-market action could eventually be used by the West against any producer.

The US said the move was not aimed at OPEC.

OPEC+ may review output in the new year based on new data on consumer compliance with China’s demand trends and price caps on Russia’s crude output and tanker traffic, JP Morgan said on Friday.

Reporting by Maha El Dahan and Rowena Edwards, Editing by Kirsten Donovan

Our Standards: Thomson Reuters Trust Principles.

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