The members of the Organization of Petroleum Exporting Countries and allies (OPEC+) reaffirmed, this Tuesday (4), their intention to increase production of the commodity by 400,000 barrels per day (bpd) in February, according to the plan agreed in July of last year.
In a statement after a ministerial meeting, the cartel explained that the compensation mechanism will be extended until June 2022. The date represents the deadline for countries that fail to comply with their offer quotas to compensate for the exceeded volume.
According to the agreement in effect, the group must decide each month whether to continue with the established production advance schedule. The next meeting is scheduled for February 2nd.
After the news, around 11:40 am (Eastern), the barrel of WTI oil for February rose 0.99%, to US$ 76.84, on the New York Mercantile Exchange (Nymex), and that of Brent for March advanced 1 .11%, at US$79.87, on the Intercontinental Exchange (ICE).
Forecast
Capital Economics assesses that OPEC+ will maintain its strategy in the coming months, increasing its production, while demand growth should normalize.
In this framework, the consultancy says in a report to clients that oil prices should be under downward pressure. She projects a barrel of Brent to end this year at $60, from about $80 today.
According to Capital Economics, the increase of 400 thousand barrels per day (bpd) today was highly expected, confirming the agreement already in force between the countries, hence the reaction contained in the markets.
For now, the Ômicron variant of covid-19, despite being highly transmissible, does not cause the same levels of hospitalization and death as other strains. “As a result, most governments have not imposed widespread lockdowns or travel restrictions, which would significantly contain demand for oil.”
At the same time, the consultancy reminds that Libyan production has recently shown a strong decline, with civil disturbances and maintenance of oil pipeline infrastructure.
In the coming weeks, production in that country should drop around 500,000 to 600,000 bpd, predicts the Capital, which more than offsets the rise planned by OPEC+. “In fact, if this holds up, the lack of supply from Libya could even lead to requests for greater increases in OPEC+ production”, he considers.
Reference: CNN Brasil
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