- OPEC+ meeting concludes without unexpected changes to its output cut strategy.
- The group agreed to lift production quotas by another 432,000 bpd.
- OPEC’s JMMC meeting lasted less than 20 minutes.
- WTI prices sank earlier in the day on the news of Biden’s planned SPR release.
The OPEC+ meeting has concluded that no change in production plans is needed, agreeing to lift the group’s production by another 432,000 barrels per day starting in May.
The 32,000 bpd above the originally agreed to 400,000 bpd is due to shifting baselines of five of its members.
Saudi Arabia’s production quota has been lifted to 10.549 million bpd, with Russia’s quota lifted by the same amount. The UAE’s quota is 3.04 million bpd, Kuwait’s is 2,694, while Iraq’s is 4.461 million bpd.
The agreement is largely in line with market expectations. OPEC’s JMMC meeting lasted less than 20 minutes and agreed on a recommendation to OPEC+ that the hike in production should total 432.000. The OPEC+ meeting kicked off immediately following, lasing just 12 minutes, signaling the group’s solid unity on its production strategy.
Some thought that the bold “leak” from the White House late Wednesday stating that the Biden team could release a million barrels of crude oil per day from the U.S. Strategic Petroleum Reserves could be enough to prompt OPEC+ to change its plans.
OPEC+ has ignored calls from several other countries—including the United States—to boost production by more than planned as high gasoline prices weigh heavily on consumers. The Biden Administration has been seeking a solution to its problem of costly retail gasoline prices for months, saying that all options to mitigate them are on the table. A mass release of SPR inventory could signal that those options—including possible deals with Venezuela and Iran–have now been exhausted.
OPEC+ lifting its production by more than planned was one of the last lingering hopes for bringing down those prices.
The next OPEC+ meeting to agree on the plan for June is set to be held on May 5.
WTI prices sank earlier in the day on the news of Biden’s planned SPR release, and remain volatile after the OPEC+ decision.
By Julianne Geiger for Oilprice.com
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