OPEC Ministers agree on 400kb/d output increase for March, Brent back above $90

• Largely in-line with market expectations, OPEC is moving ahead with plans for a 400kb/d supply increase in March.
• (CO1:COM) (NYSEARCA:USO) (NYSEARCA:XLE) (NYSE:XOM) (NYSE:RDS.A)
• Goldman cast some doubt on the decision, with a note yesterday indicating the Cartel could announce an 800kb/d increase.
• With "compliance" to OPEC quotas in January running above 130%, and Russia also struggling to keep up with higher production quotas, it's unlikely the market will put much weight on the decision to increase volumes in March.
• OPEC's next meeting will be held on February 22; however, there are sure to be plenty of headlines between now and then, as the White House looks to manage prices at the pump with Iran negotiations ongoing and Brent oil prices sitting above $90.

Comments

[Doc 224899]

Ah, for the good old days of naughty tweets and strong energy policy.

[jupenya]

Venezuela will increase production by 100k litersPD, Libya by 400kbpd starting in Q1-26, Nigeria will add, Ecuador will once it fixes it French oak wooden pipeline manana & Houthis will stop bombing SA, UAE, etc. All is well for $100 by end of Q1-22 and forward - leveling in the lows 100s for the rest of Brandon's presidency. Cheers!

[CVE-is-in-beast-mode]

We will continue to pretend to believe they can actually hit these goals, even in light of all the compelling contrary evidence.

And their actual production will slip even further behind their stated goals. 🤷‍♂️🙄

[Ruffdog]

@todallenlewis With brent at $90 OPEC+ can spend a lot of their FCF increasing production!

[Morpheus1]

@Ruffdog unless you're talking recompletions those barrels are 1.5+ years away.

[CVE-is-in-beast-mode]

@Ruffdog true, but probably not in the Permian … did you read today’s WSJ article?

[Oil & Ranching]

This is good, whether or not they meet their quota this means less spare capacity going forward, if they’re still on track with 400,000 barrels a month then spare capacity should be nearly depleted by the end of this year!

[RDLD]

What I don't understand is the United States was energy independent several years ago. JB could reverse this so the US isn't dependent on OPEC which I think most Americans would be in favor of. Especially since most Americans are concerned with inflation and the economy. I think JB is getting bad advice from his so-called experts.

[ronjon1957]

@RDLD U.S. overproduced and many companies went bankrupt. Banks don't want to loan money for drilling.

[jimoc]

@RDLD, JB asks for more product all the while doing whatever he can to ruin their business. Hypocrite to an extreme.

[jimoc]

@ronjon1957 no. The gov't doesn't want banks to loan $ to oil companies.

[Maobama]

Jimmy Carter 2.0

[jimoc]

@Maobama oh but much worse.

[michi1711]

I heard, some Opec members have problems to fulfill the higher oroduction. Later this year, we can have an announcement, all OPEC countries can produce full. But they can not produce more… Thy can not lift every month 400 bpd.
I guess, then there will be some market participants surprised.

[Ruffdog]

@michi1711 Some cannot meet their quota, others can over produce. and at $90 there is a lot of $$$ to spend on CAPEX to increase production.

[polarbear3270]

@Ruffdog Yes, but the long term transition to green energy? Why investing in dirty energy now, lets deplete the existing reserves and stop there ?

[BIZUN1973]

Brent at $90? WTI is closing in on $90. Where’s that $65 that the Brandon administration predicted?

[dynx]

@Bavossler more petroleum reserve releases? Might as well double down on stupid.
I’m curious if they’ll announce what price they replace those at….I’m guessing not.

[zip6485]

Geopolitical conflict is the best catalyst for higher crude price. Houthi is no longer a terrorist organization according to Brandon, so they will have a free hand to shoot ballistic missiles to Saudis or UAE, it is good for oil bulls.
Long PBR/A, RECAF.

[Rikki Tikki Tavi]

@zip6485
I’m waiting for the trickle through effect of the munitions that were abandoned in Afghanistan.

[jupenya]

@Rikki Tikki Tavi Brandon is buying them back - first orders; some high-quality Albanian made AK47s, some BARs, binoculars & other up to date items - our agent, HunterB-Arms LLC, Cyprus based co., handling the logistics. This effort should minimize arms available for terrorist groups, such as, school moms, etc., conversely this would maximize the Hunter enterprises. Cheers!

[jimoc]

@jupenya, can't you envision Kerry begging Iran to do a deal? this administration begging other nations to give us more oil while doing whatever they can to ruin our companies.
And you see the mess Germany is in by relying on Putin.

[Morpheus1]

Too bad OPEC+ hasn't and likely can't meet their qouta. 166k added in December. Well below their 400kbpd slated increase. Peak oil incoming.

[imdaman]

OPEC+ hasn't come close to meeting the quota since it started
Nothing to see here
$100 on its way. Nat gas up 10% as a kicker today
Thanks Brandon!

[Maobama]

Let's Go Brandon!

[farwest]

@Maobama grow up

[limitspecs38]

@Maobama - another SPR release? How'd that work out? The oil companies who take the bbls from SPR have to pay it back + a premium quantity which just adds to future demand........

[LeverageHolder]

@Maobama Agreed. Whether by design to make alternatives more attractive or through sheer buffoonery, Brandon's political pile on effect on sentiment allowing further muted investment has been the icing on the cake for oil companies who already had years of underinvestment filling their sails. The FCF party is just getting started.