LONDON/DUBAI, Dec 4 (Reuters) – OPEC+ agreed to stick to its oil output targets at a meeting on Sunday as oil markets struggled to assess the impact of a slowing Chinese economy on demand and a cap on oil prices. -7 for Russian oil on supply.
The decision comes two days after the Group of Seven (G7) countries agreed to cap Russian oil prices.
OPEC+, which consists of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western nations in October when it agreed to cut output by 2 million barrels per day (bpd), about 2 % of global demand, 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+ says it has cut production due to a weaker economic outlook. Oil prices have fallen since October on slower Chinese and global growth and higher interest rates, prompting market speculation that the group may cut output again.
But on Sunday, the group of oil producers decided to keep the policy unchanged. Its key ministers will meet on February 1 for a monitoring committee, while a full meeting is scheduled for June 3-4.
G7 countries and Australia agreed on Friday to cap the price of Russian offshore crude at $60 a barrel in a bid to deprive President Vladimir Putin of revenue while keeping Russian oil flowing to world markets.
Moscow has said it will not sell its oil below the ceiling and is analyzing how to respond.
Many OPEC analysts and ministers said the price cap was confusing and possibly ineffective because Moscow sells most of its oil to countries such as China and India, which have refused to condemn the war in Ukraine.
Neither the OPEC meeting on Saturday nor the OPEC+ meeting on Sunday discussed the price ceiling in Russia, the sources said.
Russian Deputy Prime Minister Alexander Novak said on Sunday that Russia would rather cut output than supply oil below the price ceiling, and said the ceiling could affect other producers.
Sources told Reuters that several OPEC+ members expressed frustration with the cap, saying the anti-market measure could eventually be used by the West against any producer.
The United States said the measure was not aimed at OPEC.
JP Morgan said on Friday that OPEC+ could review output in the new year based on fresh data on demand trends in China and consumer compliance with price curbs on Russian crude output and tanker flows.
Reporting by Maha el Dahan and Rowina Edwards, editing by Kirsten Donovan
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