OPEC+ agrees to seventh consecutive 400,000 bpd monthly output hike
Quantum Commodity Intelligence - The OPEC+ oil producer group has agreed to a 400,000 bpd increase for February after the group's technical committee cut its surplus estimates for the first quarter and said it expects the Omicron variant's impact on global oil demand to be "mild and short-lived".
The decision was widely expected and priced into the market, according to analysts.
"OPEC+ is likely to stick with its plan today and announce that oil production will be stepped up by another 400,000 barrels per day in February. Everything seems to be running smoothly for OPEC+ at present," said Commerzbank in a client note published prior to the meeting.
At the July 2021 meeting, the group agreed to monthly increases of 400,000 bpd from August to December, or a total of 2 million bpd, while the group retains the flexibility to review further hikes.
OPEC+ has now pledged to add a theoretical 2.8 million bpd of crude by February, but a number of members have struggled to reach quotas, either through production problems or capacity constraints.
The next OPEC+ meeting will be held on February 2, said OPEC in its press statement following the meeting.
Highlights of key OPEC+ meetings
March 2020
OPEC+ group fails to reach an agreement on cutting supplies in the face of the COVID-19 pandemic, as both Russia and Saudi increase production, triggering a sharp price drop.
April 2020
OPEC+ agrees to a record supply cut of 9.7 million bpd, oil prices rebound.
June 2020
Producers agree to extend the first phase of the 9.7 million bpd cuts for another month but announce plans for reduced cuts to 7.7 million bpd starting in August.
December 2020
Members announce a small 500,000 bpd increase for January 2021. Agree to hold meetings on a more regular basis in 2021 to review market conditions.
January 2021
Agrees to keep output steady except for small increases in Russia and Kazakhstan. Saudi Arabia announces a voluntary 1 million bpd cut for February and March.
March 2021
Agree to hold output steady apart from Russia and Kazakhstan. Saudi Arabia extends the voluntary 1 million bpd cut until at least April.
April 2021
OPEC+ agrees to gradually increase production by 1 million bpd May-July, while Saudi to restore 1 million bpd of voluntary cuts.
June 2021
OPEC+ meeting lasts under one hour, ends with an agreement to stick with the existing plan, but no discussion on output changes for August and beyond.
July 2021
OPEC+ agrees to increase output by 400,000 bpd each month from August to December, adding 2 million bpd in total, but with the flexibility to review the proposed hikes.
September 2021
In a short meeting, OPEC+ agreed to a further 400,000 bpd of production increases for October.
October 2021
OPEC+ resists pressure to announce further increases and sticks to a 400,000 bpd hike in November.
November 2021
Continues with agreed 400,000 bpd but pledges to make any shortfall from underproducing members.
December 2021
Agrees to a further 400,000 bpd hike in January after pressure from consumer countries, despite Omicron Covid surge and Q1 oversupply fears.
January 2022
In a short meeting, OPEC+ agreed to add 400,000 bpd in February.
