Oil sank to a 15-month low on Wednesday, with Brent crude below $72 a barrel, on concerns about contagion from a banking crisis. Crude stabilised on Thursday after Credit Suisse was thrown a financial lifeline by Swiss regulators.
“It’s purely financially driven and has nothing to with the demand and supply of oil,” one of the delegates said, asking not to be named. OPEC+ is “most likely wait and see” in expectation that the situation will “normalise soon”.
Three other delegates from the OPEC+ producer group comprising the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, made similar remarks.
The comments will dampen any speculation that OPEC+ is concerned about weakening prices and might consider further steps to support the market. The group’s next policy meeting is not until June, though an advisory panel of key ministers meets on April 3.
One of the delegates said OPEC’s latest monthly oil market report, released on Tuesday with an upgraded demand forecast for China, pointed to a sound balance between supply and demand.
“We are focusing on market fundamentals,” another of the sources said.
Last November, with prices weakening, OPEC+ reduced its output target by 2 million bpd – the largest cut since the early days of the COVID-19 pandemic in 2020. The same reduction applies for the whole of 2023.
Ministers from Algeria and Kuwait this week praised the decision and Saudi Arabia’s energy minister told Energy Intelligence that OPEC+ will stick to the reduced target until the end of the year.