LONDON/DUBAI, Dec 4 (Reuters) – OPEC+ agreed to stick to its oil production targets at a meeting on Sunday as oil markets struggle to assess the impact of a slowdown of the Chinese economy on demand and a G7 price cap on Russian oil on supply.
The decision comes two days after the Group of Seven (G7) countries agreed to a price cap on Russian oil.
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 it agreed to cut the production of 2 million barrels per day (bpd), or about 2% of world production. request, from November to the end of 2023.
Washington has accused the group and one of its leaders, Saudi Arabia, of siding with Russia despite Moscow’s war in Ukraine.
OPEC+ argued that it had cut production due to a weaker economic outlook. Oil prices have fallen since October due to slowing Chinese and global growth and rising interest rates, prompting market speculation that the group could cut production again.
But on Sunday, the group of oil producers decided to keep the policy unchanged. Its main ministers will then meet on February 1 for a follow-up committee while a plenary meeting is scheduled for June 3 and 4.
The G7 nations and Australia agreed on Friday to a $60-a-barrel price cap on Russian maritime crude oil in a bid to starve President Vladimir Putin of revenue while keeping Russian oil flowing to markets global.
Moscow said it would not sell its oil below the cap and was considering how to respond.
Many OPEC analysts and ministers said the price cap was confusing and likely ineffective, as Moscow sold most of its oil to countries like China and India, which refused to condemn the war in Ukraine.
Neither Saturday’s OPEC meeting nor Sunday’s OPEC+ meeting discussed price caps in Russia, sources said.
JP Morgan said Friday that OPEC+ may review production in the new year based on new data on Chinese demand trends and consumer compliance with price caps on Russian crude production and the flow of tankers.
Reporting by Maha el Dahan and Rowena Edwards, editing by Kirsten Donovan
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