The Organization of Petroleum Exporting Countries and its allies are set to stick to modest oil output increases on Thursday despite the volitiality of the markets caused by Russia’s invasion of Ukraine and new COVID lockdowns in China.
Delegates from the group said OPEC+ was set to agree another monthly increase of 432,000 barrels per day in its production target for June, according to Reuters.
The OPEC+ meeting comes a day after the EU proposed a phased oil embargo on Russia in its toughest measures yet to punish Moscow for its war in Ukraine.
Meeting timings…
The Joint Ministerial Monitoring Committee Meeting is scheduled to take place at 11am GMT.
The 28th OPEC and non-OPEC Ministerial Meeting is slated to convene 30 minutes later.
OPEC Secretary General Mohammad Barkindo said it was not possible for other producers to replace Russian supply.
“What is clear is that Russia’s oil and other liquids exports of more than 7 million bpd cannot be made up from elsewhere. The spare capacity just does not exist,” Barkindo said on Wednesday.
OPEC now expects 2022 world oil demand to expand by 3.67 million bpd in 2022, down 480,000 bpd from its previous forecast. Barkindo said the Chinese lockdowns were curbing demand.
OPEC Secretary General Mohammad Barkindo (File/AFP)
Oil markets react
Oil prices extended gains on Thursday on supply concerns as the EU laid out plans for new sanctions against Russia, including an embargo on crude in six months, offsetting concerns over weaker Chinese demand.
Brent crude futures had climbed 85 cents, or 0.8 percent, to $110.99 a barrel by 0638 GMT, while US West Texas Intermediate crude futures rose 65 cents, or 0.6 percent, to $108.46 a barrel.
Both benchmarks jumped more than $1 a barrel earlier in the volatile session after gaining more than $5 a barrel on Wednesday.
US wants more
The US has repeatedly asked OPEC to raise production but the organization has resisted the calls amid strained relations with Washington.
The West’s energy watchdog, the International Energy Agency, agreed last month to release record volumes of stocks to help cool down prices and offset supply disruptions from Russia.