OPEC’s Token Supply Boost Looks Astute as Oil Sentiment Sours - Bloomberg

OPEC’s Token Supply Boost Looks Astute as Oil Sentiment Sours - Bloomberg

OPEC’s latest supply increase seemed too small to satisfy anyone when it was unveiled last week, but it’s increasingly looking like the right call.

At just 100,000 barrels a day -- or 0.1% of global output -- the hike announced by Saudi Arabia and its partners appeared pointless or, worse still, a deliberate snub to US President Joe Biden following his trip to the kingdom and calls for additional barrels.

The Organization of Petroleum Exporting Countries and its partners explained that they had to use their “severely limited” spare capacity with “great caution.” Subsequent developments are vindicating their decision.

“The latest agreement is actually a fair deal,” Francesco Martoccia, an analyst at Citigroup Inc., said in a report.

International oil futures have sunk 5% this month, with Brent trading near $95 a barrel amid a lackluster holiday driving season in the US and growing fears over a global economic slowdown.