Oil prices ease after OPEC+ meeting
Oil prices eased on Thursday, but remain within touching distance of the $90 milestone after OPEC+ producers stuck to planned moderate output increases.
Both major benchmarks were slightly weighed down by underwhelming US payrolls data, but drops have been mitigated by continued tight supplies.
Brent Crude dipped one per cent to $88.58 per barrel on Thursday morning, while WTI Crude was down 1.02 per cent to $87.36.
US private payrolls fell for the first time in a year in January, raising the risk of a sharp decline in employment that would deal a temporary setback to the labour market.
There is also increasing expectation of multiple interest rate hikes, with Goldman Sachs anticipating five bumps in the rate this year and Commerzbank anticipating four.
Nevertheless, tight global supplies and geopolitical tensions in Eastern Europe and the Middle East have boosted oil prices by about 15 per cent so far this year.
Despite continued calls for the major oil consumers such as US, India and Japan – OPEC+ has maintained its conservative output increases of 400,000 per day.
As multiple members have failed to reach production targets over recent months, it is unclear whether the raised outputs are realistic.
Commerzbank analyst Carsten Fritsch also argued that looming concerns over conflict in Ukraine are both affecting prices and production strategies in OPEC countries.
He said: “Several OPEC+ representatives believe the tensions between Russia and Ukraine are the cause of the upswing in prices. Pumping more oil onto the market just now will do little to change this in our view. It is more important to be able to supply more oil to the market if need be. And for this to be possible sufficient spare capacities are vital.”