PRESS ROOM
OPEC provides markets with an upside surprise
Tuesday 16th March '21
Against market expectations, the Organisation of Petroleum Exporting Countries (OPEC) and its partner countries (combined as OPEC+) decided to keep production flat going into April 2021, instead of beginning to taper down its 7.1 million barrels per day production restraint. OPEC+’s surprise policy outcome has been a boost for WTI and Brent, with both crude oil benchmarks rising over 5% on 4th March 20211 after the meeting. If they maintain such production tightness, oil prices could rise further, as global oil inventory could decline further. The key question is whether OPEC+ will maintain such a tight policy in the coming months as the group is continually giving away market share. For now, oil markets remain in backwardation, providing oil investors with a positive roll yield in addition to rising spot prices.