OPEC+ to Discuss January Oil Output Quotas
OPEC+ will meet virtually today to discuss January oil output quotas.
The meeting comes amid surging oil prices and action from world leaders, including US President Joint Biden committing to sell 50 million barrels of the US’ strategic oil reserves to bring prices down. Additionally, the oil crisis has been further complicated by the emergence of the COVID-19 Omicron variant, which has temporarily checked the rise in prices despite the fact they remain high on average. OPEC+ will aim to reach a decision on whether oil production should be increased to reduce prices.
The parties to the meeting are likely to stick with their original plans of incrementally increasing daily output quotas by 400,000 barrels per day each month. This will be done to placate nations dissatisfied with prices and prevent more selloffs.
In the medium-term, oil prices can be expected to remain high but not to climb significantly due to increased quotas, oil reserve sales undertaken by several nations and the uncertainty around the spread of COVID-19. In the long-term expect the high prices to further encourage a transition to renewable energy sources as the international community seeks to reduce reliance on oil.
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