OPEC+ leaves oil supply on hold as Russia price cap starts
Following the G7 decision to cap prices of Russian seaborne oil at $60, supply targets were left on hold after the OPEC+ meeting over the weekend. This comes at a time when the outlook is very difficult to predict.
(Video Transcript)
OPEC+ meeting
Over the weekend, OPEC+ met on a virtual conference and it's agreed to stick to its oil output targets as the oil markets struggle to assess the impact of a slowing Chinese economy on demand. And that news of the G7 price cap on Russian oil supply which came through the EU, agreeing to a $60 level.
OPEC+, which comprises the OPEC nations and its allies, including Russia, angered the United States and other Western nations back in October when it agreed to cut output by two million barrels per day, which supported the price, to about 2% of world demand from November until the end of 2023.
Now, this decision from OPEC+ came two days after the G7 agreed a price cap on Russian oil of $60 per barrel. Meanwhile, the Baker Hughes rig count out late on Friday in the US remained unchanged at 784 on Friday, 38% above the same levels this time last year.
You can see the extra amount of oil that's coming through in the market as a result of that. Drilling rigs targeting crude oil and natural gas both stayed flat for the week at 627 and 155 respectively, while two rigs remain classified as miscellaneous.
Brent chart
Let's take a look at what's happening with the price of Brent in the wake of that meeting over the weekend.
You can see not really much move at 86, 86 for the price of Brent, same sort of price action for WTI. So despite the fact there has been a news flow over the weekend, you can see that oil, not really much moved in the last few days of trade.
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