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OPEC+ may choose to suspend its production increase plan

OPEC+ may choose to suspend its production increase plan


         On November 24, local time, the Federal Reserve announced the minutes of the November Federal Open Market Committee (FOMC) monetary policy meeting. The minutes show that many policymakers said that if inflation remains high, they are willing to accelerate the cancellation of bond purchase plans and accelerate the pace of interest rate hikes.

   On November 23, the U.S. government announced that it would unite with multiple major oil consuming countries to release crude oil reserves, hoping to cool down oil prices through this move. The US government announced that it will release 50 million barrels of strategic oil reserves, and Japan, India, South Korea, and the United Kingdom have also expressed their intention to release their own oil reserves.

   The Organization of Petroleum Exporting Countries and its allies (OPEC+) have warned that if other countries continue to release oil reserves, the organization will reconsider potential production increase plans. However, with the emergence of new mutant strains in South Africa, oil prices have fallen sharply. Some analysts believe that OPEC+ may choose to suspend its production increase plan, or even reduce production.

  OPEC+ will hold a meeting on Thursday. Helima Croft, head of global commodity strategy at Royal Bank of Canada (RBC), said that due to the release of the Strategic Petroleum Reserve (SPR), OPEC may decide to suspend production.

   Citigroup strategists recommend reducing risky asset positions, because the new South African mutant strain raises concerns about global economic growth and the path of monetary policy.

"If the situation evolves to the possibility of more travel and lockdown measures in the coming weeks, then this could have a significant impact on a series of important central bank meetings in December," strategists Jamie Fahy, Adam Pickett and Yamin Younes told Friday A client report wrote, “In the short term, the path of the epidemic may exceed all other considerations of the central bank”

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