Some analysts, and traders, had expected a higher production increase, considering the recent rally that has frustrated major oil-consuming nations, including the United States.
Earlier this week, Goldman Sachs had expressed the view that OPEC plus might decide to announce a larger production increase for March than the usual 400,000 bpd, keeping in view the recent oil rally to and the potential for renewed discontent from major oil importers at these high price levels.
OPEC plus confirmed the 400,000-bpd increase in record time and didn’t even plan a press conference after the meeting.
Brent Crude prices returned to US$90 per barrel just after news of the modest production increase and the record-short meeting broke.
While the nominal increase is modest, as in the previous seven months, many producers within the OPEC+ group are struggling to pump to their quotas, leaving an increasingly large gap between production increase on paper and actual growth in output, which leaves the market tighter than many analysts and forecasters, had anticipated just a few months ago.
Going forward, the market will be closely looking at how much of that increase OPEC plus can actually deliver, considering that half of its members have lagged in ramping up output to their quotas so far, while more producers—with few exceptions such as Saudi Arabia and the UAE—will be struggling to raise production.
According to the production table provided by OPEC, Saudi Arabia and Russia will each have a quota of 10.331 million bpd in March 2022.
The next OPEC plus meeting is scheduled for March 02, 2022.
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