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Oil futures rose Tuesday, with global benchmark Brent crude nearing the $80-a-barrel threshold, on expectations that the Organization of the Petroleum Exporting Countries and its allies won’t deviate from a plan to gradually boost output.
West Texas Intermediate crude for February delivery
CL00,
CLG22,
the U.S. benchmark, rose 29 cents, or 0.4%, to $76.37 a barrel on the New York Mercantile Exchange. March Brent crude
BRN00,
BRNH22,
was up 34 cents, or 0.4%, at $79.32 a barrel on ICE Futures Europe. The most actively traded Brent contract traded briefly above $80 on Dec. 29 and 30 but last closed above that level on Nov. 25, according to FactSet data.
OPEC and its allies, together known as OPEC+, were meeting Tuesday via videoconference to decide on output levels in February. At the meeting in December, the group left its current agreement in place to boost monthly overall production by 400,000 barrels per day for the month of January.
“No surprises are expected, OPEC+ is likely to ratify another 400,000 [barrel a day] increase in production targets for February, but we may be in for a repeat of the group’s masterstroke from December — keeping the door open to change course until the next meeting in February should market conditions worsen,” said Bjørnar Tonhaugen, head of oil markets at Rystad Energy, in a note.
OPEC+ has grown more confident in the market’s ability to absorb further increases in supply, the analyst said, noting that Brent prices has recovered after falling below $70 a barrel in early December on worries the spread of the omicron variant of the coronavirus would dent demand. Instead, real-time transportation data globally indicates little significant impact on demand.
