Oil Down, Focus on Latest OPEC+ Supply Policy Meeting

By Gina Lee

Oil prices declined on Monday morning in Asia, as the OPEC+ group prepared to convene for a meeting to discuss its supply policy in light of recent price fluctuations.

Crude futures were down 0.28% to $79.06, while Brent crude fell 0.32% to $75.64. Last week, Brent futures surged to nearly a three-year high, surpassing the $80 mark, fueled by a global energy crunch and a rebound in fuel demand.

Market sentiment has improved amid growing confidence in robust global economic growth, with investors closely monitoring the upcoming OPEC+ meeting, according to analysts at ANZ Research.

There is ongoing pressure from several countries on the OPEC+ coalition to ramp up production and reduce prices as fuel demand continues to recover. In July 2021, OPEC+ agreed to gradually increase output by 400,000 barrels per day each month until at least April 2022 to phase out 5.8 million barrels per day of existing production cuts.

Reports indicate that producers are contemplating adding more supply than previously agreed upon within the OPEC+ framework, though any changes would not be implemented until November, as volumes for October were already established in the last meeting held in September.

The sharp rise in gas prices, which have spiked by 300% and are currently trading around $200 per barrel in equivalent terms, has limited some losses in the oil market. This increase has prompted users to switch to fuel oil and other petroleum products to meet electricity generation and industrial demands.