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OPEC+ sticks to planned output, oil prices ease

OPEC+ sticks to planned output, oil prices ease

/ Oil & Gas / Thursday, 03 February 2022 08:16

Oil prices eased as US private payrolls fell for the first time in a year in January, indicating chances of a drop in employment offsetting the labor market. However, tight global supplies and geopolitical tensions in Russia and Ukraine and the Middle East have boosted oil prices by about 15% so far this year.

Brent crude fell 37 cents, or 0.4%, to $89.10 a barrel, after rising 31 cents. US West Texas intermediate crude was down 54 cents, or 0.6%, at $87.72 a barrel, having gained 6 cents the previous day. Prices were also under strain following Iran's oil minister’s announcement of the country returning to the oil market shortly.

Over the past week, crude benchmarks hit their highest prices since October 2014, with US crude rising to as much as $89.72 and Brent touching $91.70.

Meanwhile, OPEC+ has agreed to stick to moderate rises of 400,000 barrels per day (bpd) in its oil output with the group already struggling to meet existing targets and despite pressure from top consumers to raise output more quickly. The OPEC+ joint technical committee report expects the overall surplus in 2022 to reach 1.3 million bpd, compared to previous forecast of 1.4 million bpd.

US crude stockpiles dropped by 1 million barrels last week, the US energy information administration said, against expectations for an increase, while distillate inventories also dropped amid strong demand both domestically and in export markets.

A forecast of rough winter in parts of US is likely to boost oil prices, especially as some regions substitute out natural gas to meet energy demands.

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