OPEC+ keeps steady policy amid weakening economy, Russian oil cap

  • There is no discussion about the Russian price cap-representatives
  • Oil prices have come under pressure due to the weak economy
  • The next meetings will be held on February 1 and June 3-4

LONDON/DUBAI, Dec 4 (Reuters) – OPEC+ agreed to keep its oil output targets at a meeting on Sunday as oil markets struggled to assess the impact of a slowing Chinese economy on demand. and G7 price restrictions on Russian oil supply. .

The decision comes two days after the Group of Seven (G7) countries agreed to lower Russian oil prices.

OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western countries in October when they agreed to cut production by 2 million barrels per day (bpd). About 2% of the world. Demand, from November to the end of 2023.

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Washington has accused the group and one of its leaders, Saudi Arabia, of supporting Russia despite Moscow’s war in Ukraine.

OPEC+ argued that it cut production due to a poor economic outlook. Oil prices have fallen since October due to slower Chinese and global growth and higher interest rates, fueling market expectations that the group will cut output.

But on Sunday, the group of oil producers decided to keep the policy unchanged. Its key ministers will meet the monitoring committee on February 1 while the full session is scheduled for June 3-4.

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On Friday, G7 nations and Australia agreed to cap the price of Russian offshore oil at $60 a barrel to deprive President Vladimir Putin of income while Russian oil continues to flow to international markets.

Moscow has said it will not sell its oil under the cap and is analyzing how to respond.

Many analysts and OPEC ministers have said the price cap is confusing and perhaps ineffective because Moscow sells most of its oil to countries such as China and India, which have refused to condemn the conflict in Ukraine.

Neither the OPEC meeting on Saturday nor the OPEC+ meeting on Sunday discussed Russian prices, sources said.

Russian Deputy Prime Minister Alexander Novak said on Sunday that Russia would cut output rather than supply oil below the price floor, saying the cap could affect other producers.

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Sources told Reuters that many OPEC+ members expressed dismay at the cap, saying the anti-market measure could ultimately be used by the West against any producer.

The US said the move was not OPEC’s intention.

JP Morgan said on Friday that OPEC+ could review output in the new year based on updates on Chinese demand trends and consumer compliance with price caps on Russian crude products and tanker flows.

Reporting by Maha Al Dahan and Rowena Edwards, editing by Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

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