OPEC+ Expected to Stick to Planned March Output Target Increase

OPEC+ production policies contribute to the stability of oil markets. (Reuters)
OPEC+ production policies contribute to the stability of oil markets. (Reuters)
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OPEC+ Expected to Stick to Planned March Output Target Increase

OPEC+ production policies contribute to the stability of oil markets. (Reuters)
OPEC+ production policies contribute to the stability of oil markets. (Reuters)

OPEC+ will probably stick with a planned increase in its oil output target for March when it meets on Wednesday next week, several sources from the producer group said, as it sees demand recovering despite downside risks from the pandemic and looming interest rate rises.

While two sources from the Organization of the Petroleum Exporting Countries, Russia and allies, known as OPEC+, said oil at a seven-year high close to $90 a barrel might prompt the group to consider further steps, the vast majority of sources said no new decision was expected at the Feb. 2 online meeting, Reuters reported.

One Russian source told Reuters the country was concerned the price rally might revive a boom in the United States shale production.

OPEC+ has raised its output target each month since August by 400,000 barrels per day (bpd) as it unwinds record production cuts made in 2020.

Current plans would see OPEC+ do so again in March.

OPEC+ has resisted pressure from the United States since last year to raise supplies more quickly.

Despite its increased targets, actual output from OPEC+ has not kept pace as some members struggle with capacity constraints, and this has been a factor underpinning prices.

OPEC+ missed its production target by 790,000 bpd in December as members such as Nigeria and Angola struggled to raise output, the International Energy Agency said.

Several banks and analysts including Morgan Stanley and JP Morgan, expect oil prices to top $100 barrel later in the year amid tight OPEC+ spare capacity and strong demand.

Some OPEC+ sources however believe that the recent price rally is driven more by geopolitical tensions than fundamentals.



EU Approves Counter-tariffs on US Goods, Says Trade Deal within Reach

European Union flags fly outside the European Commission in Brussels, Belgium November 8, 2023. REUTERS/Yves Herman/File Photo
European Union flags fly outside the European Commission in Brussels, Belgium November 8, 2023. REUTERS/Yves Herman/File Photo
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EU Approves Counter-tariffs on US Goods, Says Trade Deal within Reach

European Union flags fly outside the European Commission in Brussels, Belgium November 8, 2023. REUTERS/Yves Herman/File Photo
European Union flags fly outside the European Commission in Brussels, Belgium November 8, 2023. REUTERS/Yves Herman/File Photo

The European Commission said on Thursday a negotiated trade solution with the United States is within reach - while EU members voted to approve counter-tariffs on 93 billion euros ($109 billion) of US goods in case the talks collapse.

The 27-nation bloc's executive has repeatedly said its primary focus is on reaching a deal to avert 30% US tariffs that US President Donald Trump has said he will apply on August 1.

"Our focus is on finding a negotiated outcome with the US ... We believe such an outcome is within reach," an EU spokesperson said in response to reporters' questions, Reuters reported.

Alongside negotiations, the Commission has pressed on with plans for potential countermeasures, merging two packages of proposed tariffs of 21 billion euros and 72 billion euros into a single list and submitting this to EU members for approval.

The rate would be up to 30%, designed to mirror US tariffs, EU sources said.

Diplomats said EU countries overwhelmingly approved the measures on Thursday, which the Commission later confirmed.

The first package of countermeasures would enter force on August 7, with tariffs on soybeans and almonds delayed until December 1, an EU official said. The second package would enter force in two stages on September 7 and February 7.

So far the EU has held back from imposing any countermeasures, despite Trump's tariffs already covering 70% of EU exports. EU member states authorised the first package of countermeasures in April, but these were immediately suspended to allow time for negotiations.

CLOSING ON DEAL

The EU and United States now appear to be heading towards a possible trade deal, according to EU diplomats, which would result in a broad 15% tariff on EU goods imported into the US, mirroring a framework agreement Washington struck with Japan. Trump would still need to take any final decision.

The White House said discussions of a deal should be considered "speculation". Trump trade adviser Peter Navarro told Bloomberg News the report from the EU should be taken with "a grain of salt."

French Finance Minister Eric Lombard and Italian Industry Minister Adolfo Urso told a joint press conference in Paris they were not aware of a draft agreement, Urso adding he would only pass judgment when one was reached.

There was little information available about what the EU would offer the United States to secure a deal. One EU diplomat said the bloc was not looking at a pledge of investment in the United States, as Japan has agreed.

Another said the EU might reduce some of its own duties. Its current import duty for cars is 10%.

Under the outlines of the potential deal, the 15% rate could apply to sectors including cars and pharmaceuticals and would not be added to long-standing US duties, which average just under 5%.

There could also be exemptions for sectors such as aircraft, lumber as well as some medicines and agricultural products, which would not face tariffs, diplomats said.

Washington does not, however, appear willing to lower its 50% tariff on steel.