The oil-producing countries of OPEC and allies such as Russia will hold an important meeting on Sunday. There, countries will likely decide they don’t want to cut their production in January. If they really did, it would be good news for Dutch motorists who fill up on petrol. Further production cuts could support the price of oil, which could lead to higher prices at the pump.
Reuters news agency recently reported on an insider basis that the alliance, where Saudi Arabia is the dominant party, is likely to maintain its current production limit of 2 million barrels (of 159 litres) per day. . There may be talk of further production cuts, but OPEC+ is unlikely to actually do so.
Hard descent
Oil prices have fallen sharply in recent times. This is mainly due to concerns about severe corona lockdowns in the world’s largest oil importer, China, and weakening demand for oil as the global economy cools due to steep interest rate hikes from part of the central banks. However, it is still very uncertain exactly how oil demand will develop in the near future and this could justify a wait-and-see attitude by OPEC+.
It is also not yet clear how exactly the European measures to counter Russia due to the war in Ukraine will affect the oil market. EU countries just reached an agreement on Friday on a ceiling for Russian oil being transported to Europe by sea. In addition, the European boycott of Russian oil delivered by sea will take effect on Monday. If some of the world’s oil disappears, it could push oil prices up again. According to experts, how hard the blow of the European embargo on tanker oil will be is still a big question mark.
Source: BNR
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