OPEC+ producers confirmed their plans to maintain current production until March, with slight deviations from Kazakhstan, Iraq and Russia. Saudi Arabia cut its official selling prices for the third month in a row, indicating limited scope to increase production and keep premiums at five-year lows, noted Barbara Lambrecht, commodities analyst at Commerzbank.
Oil supply gains are constrained amid price adjustments
“After brief discussions over the weekend, the eight OPEC+ producers who imposed voluntary production restrictions confirmed their intention to keep production steady until the end of March. This is not surprising. The path is likely to be confirmed again at the next meeting in early February.”
“Some countries are deviating from their plans: Kazakhstan and Iraq produced very large volumes in November, while Russia in particular was lagging behind. But overall, the deviation was limited to 140,000 bpd, according to IEA figures.”
“The current lack of scope to increase production is underscored by Saudi Arabia’s official selling prices, which were lowered again for February: reduced for the third month in a row, the premium for Arabian Light crude to the Oman/Dubai benchmark is now just 30 US cents in Asia, down from 60 US cents in January. This is the lowest level in five years.”
