OPEC+ keeps steady policy amid weakening economy, Russian oil cap

  • No discussion about the Russian price range – representative
  • Oil prices come 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 at a meeting on Sunday to stick to their oil production targets as oil markets grapple with the effects of a slowing Chinese economy on demand and a G7 price cap on Russian oil on supply. Struggling to assess the impact. ,

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

OPEC+, comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western nations in October when it agreed to cut production by 2 million barrels per day (bpd) , about 2% of world demand, from November to the end of 2023.

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

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

But on Sunday the group of oil producers decided not to change the policy. The next meeting of its monitoring committee of key ministers will be held on February 1, while the full meeting is scheduled for June 3-4.

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On Friday, G7 nations and Australia agreed a $60 a barrel price cap on Russian maritime crude to deny President Vladimir Putin revenue while keeping Russian oil flowing to global markets.

Moscow said it would not sell its oil under this limit and is analyzing how to respond.

Many analysts and OPEC ministers have said the price cap is confusing and perhaps inefficient because Moscow is selling most of its oil to countries such as China and India, which have refused to condemn the war in Ukraine.

Sources said that neither the OPEC meeting on Saturday nor the OPEC+ meeting on Sunday discussed the Russian price cap.

Russia’s Deputy Prime Minister Alexander Novak said on Sunday that Russia would rather cut production than supply oil under a price cap, adding that the cap could affect other producers.

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Sources have told Reuters that many OPEC+ members have expressed frustration over the cap, adding that the anti-market measure could eventually be used by the West against any producers.

The United States said the measure was not aimed at OPEC.

JPMorgan said on Friday that OPEC+ may review output in the new year based on the latest data on Chinese demand trends and consumer compliance with Russia’s crude production and price limits on tanker flows.

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

Our Standards: The Thomson Reuters Trust Principles.

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