(OPEC+) OPEC+ has approved the 400,000 barrel a day increase in oil output scheduled for February, citing improved global outlook.
OPEC+ cite rising traffic and factory activity in major Asian consuming nations amid falling inventories in the US which has pushed prices to almost $80 a barrel.
It now remains to be seen whether OPEC+ will deliver the planned output hike, with some members, including Nigeria and Angola, facing struggles in reaching the production targets.
The planned increase also faces uncertainties, with disruptions in air travel by coronavirus infections leading to flight cancellations. Chinese demand is also weakening due to its zero-Covid policy and tough stance on pollution.
Chief oil analyst at Energy Aspects Ltd says even if OPEC+ pushes the 400,000 barrels a day, only half or less of it is reaching the market. Only 130,000 bpd is expected to hit the market in January, and up to 250,000 bpd in February.
OPEC+ has now restarted roughly two-thirds of the output that was cut at the initial stages of the pandemic. The group will feed the market with the remaining cuts as consumption recovers while also keeping inflation in check.
The oil cartel projects global oil output to exceed demand by 1.4 million bpd in the first three months of this year, less than 1.9 million bpd in the previous forecast
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