US Pressure Trumps Virus: OPEC+ Agrees to Maintain Oil Output Hike

The United States has repeatedly pushed OPEC+ to accelerate output hikes as U.S. gasoline prices soared and President Joe Biden’s approval ratings slid.

Ahmad Ghaddar, Alex Lawler and Olesya Astakhova, Reuters
US Pressure Trumps Virus: OPEC+ Agrees to Maintain Oil Output Hike

“Politics triumphs over economics. Consumer countries mounted enough pressure,” said veteran OPEC observer Gary Ross. “But weaker prices now will only mean stronger later.” (Source: OPEC headquarters by LukeOnTheRoad / Shutterstock.com)

OPEC and its allies agreed on Dec. 2 to stick to their existing policy of monthly oil output increases despite fears that a U.S. release from crude reserves and the new Omicron coronavirus variant would lead to a fresh oil price rout.

Benchmark Brent crude fell more than $1 after the deal was reported, before recovering some ground to trade around $70/bbl. It is now well below October’s three-year highs above $86 but still more than 30% up on the start of 2021.

The United States has repeatedly pushed OPEC+ to accelerate output hikes as U.S. gasoline prices soared and President Joe Biden’s approval ratings slid. Faced with rebuffals, Washington said last week it and other consumers would release reserves.

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