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Oil Holds Near Seven-Year High as Traders Count Down to OPEC+

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Oil held steady ahead of an OPEC+ meeting that may endorse another modest hike in output, with traders speculating that the actual increase delivered could again fall short of the headline figure.West Texas Intermediate was little changed near the highest level since 2014, after rallying 17% in January. Global benchmark Brent traded near $89 a barrel, with prices steeply backwardated in a reflection of market tightness.

The Organization of Petroleum Exporting Countries and its allies are expected to ratify a 400,000 barrel-a-day output increase for March when they convene on Wednesday, maintaining the pace of restoring supply shuttered at the height of the pandemic. Still, there’s concern that some members of the alliance can’t meet their production targets, helping to strengthen a robust oil market.

“I think they are going to stick to the 400,000 for now,” Energy Aspects chief oil analyst Amrita Sen said in a Bloomberg Television interview. “If anything, comparatively the flat price is cheap,” given that the current strength in timespreads is pointing to a very tight market, she said.

Crude has roared higher in 2022 after jumping 55% last year. The surge has been driven by the steady global revival in demand, lower stockpiles and sporadic interruptions to supplies. Tensions over Ukraine, driven by concerns that Russia may invade its smaller neighbor, have also boosted prices in recent weeks. Moscow says it has no plan to send in troops.

  • WTI for March delivery slipped 0.1% to $88.09 a barrel at 10:11 a.m. London time.
  • Brent for April settlement was down 0.2% at $88.99.

Goldman Sachs Group Inc. has warned that after the recent climb in prices, OPEC+ may choose to deliver more supply than expected this time around. Nevertheless, the bank said it remains optimistic that oil’s rally will continue.


Crude remains in backwardation, a bullish pattern marked by near-term prices commanding a premium over those further out. Swaps tied to the key North Sea oil market are pricing at their strongest level in years.

The industry-funded American Petroleum Institute reported on Tuesday U.S. oil inventories fell by 1.65 million barrels last week, according to people familiar with the figures. The data also showed a draw at the key Cushing storage hub. A drop, if confirmed by government numbers later on Wednesday, would be a surprise: a Bloomberg survey of analysts shows a build of 1.8 million barrels.

Related coverage:
  • Oil traders are tracking a U.S. cold blast that could boost energy demand and will bring freezing temperatures to the nation’s shale heartland — Midland, Texas.
  • Exxon Mobil Corp. plans to boost output by 25% this year in the Permian Basin, the biggest U.S. oil-producing region.
  • The amount of subsidy given to Japan’s refiners will rise after average gasoline prices climbed.
  • Germany’s fuel-distribution system was hit by a cyberattack.

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