Brent Oil Rises Even as OPEC+ Agrees to Boost Production - Bloomberg

Brent Oil Rises Even as OPEC+ Agrees to Boost Production - Bloomberg

PRICES
West Texas Intermediate rose 0.5% to $76.48 a barrel at 9:30 a.m. in New York Brent for March settlement gained 0.8% to $79.58

Oil ticked higher with global supplies in focus, even after OPEC+ agreed to revive more oil production.

Futures in London rose 0.8% but were still beneath $80 a barrel. With demand largely withstanding the omicron variant, the producer group on Tuesday approved a 400,000 barrel-a-day increase in production scheduled for February, as expected. Its analysts on Monday cut estimates for a surplus in the first quarter, predicting weaker supply growth from rivals.

The overall supply-demand backdrop is looking better for OPEC+. The group’s production increases are likely to be less than the agreed levels as some members struggle. Russia failed to raise output last month while production in OPEC member Libya is expected to fall again this week. The market structure remains in a bullish backwardation pattern, which indicates continued supply tightness.

“The biggest challenge is starting to be to actually implement the theoretical rise in production as more and more producers start to struggle,” said Hans van Cleef, senior energy economist at ABN Amro.