OPEC+ caution and money behind reluctance to pump more oil – Reuters
OPEC and its allies’ (OPEC+) decision on Monday to maintain its plan to a gradual increase to oil output was partly driven by concern that demand and prices could weaken, Reuters reports, citing three sources close to the group.
Key takeaways
“After seeing their income slide during the pandemic-induced demand and price collapse in 2020, the OPEC+ oil producers' alliance led by Russia and top exporter Saudi Arabia are enjoying the boost in revenues.”
"Everyone is happy.”
“The group was considering a larger boost of 800,000 bpd - almost 1% of world output, ahead of Monday's meeting.”
"Based on past lessons, OPEC is more cautious because any hasty decision can lead to a sharp drop in oil prices.”
"So the political pressure of the United States and others has not yet been effective in changing this strategy."
Market reaction
WTI is consolidating Wednesday’s sharp correction from seven-year tops of $79.78, now trading just below $77, down 0.63% on the day. The above report has little to no effect on the black gold.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
