As EU's Russian Oil Cap Deadline Nears, OPEC+ Virtual Meet Reportedly Indicates Little Possibility Of Policy Change

As EU's Russian Oil Cap Deadline Nears, OPEC+ Virtual Meet Reportedly Indicates Little Possibility Of Policy Change

The decision of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to conduct its Dec. 4 meeting virtually indicates there is little likelihood of a policy change, Reuters reported, citing a source.

A virtual meeting also highlights the pending European Union deal on a price cap on Russian oil ahead of the Dec. 5 deadline imposed by the bloc for a full embargo on Moscow's purchases of seaborne crude, the report said.

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"OPEC+ would rather sit on the bench at this time and assess the outcome of what happens on Monday," the source told Reuters. In October, OPEC+ had agreed to reduce its output by 2 million barrels per day (bpd) which is equal to 2% of global supply, effective until December next year.

Oil prices rose for a third day following a significant draw in U.S. crude stockpiles. West Texas Intermediate futures rose toward $79 a barrel.

The United States Brent Oil Fund BNO closed 1.27% higher on Tuesday while the Vanguard Energy Index Fund ETF VDE closed 1.34% higher.

Expert Take: Jeff Currie, global head of commodities at Goldman Sachs said the medium-term oil outlook for 2023 was “very positive,” according to CNBC. He said Goldman Sachs plans to “stick to our guns” with a $110-a-barrel Brent crude forecast for next year, the report said.

“Demand is probably heading south again in China given what’s going on,” Currie added. China’s November factory activity narrowed at a faster pace. The official manufacturing purchasing managers' index (PMI) was recorded at 48 against a 49.2 reading in October, according to the National Bureau of Statistics (NBS).

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Posted In: Crude OilEuropean UnionOPEC+Russian oilGovernmentNewsRegulationsCommoditiesMarkets