Americas News
Oil Mixed As Analysts Debate Whether OPEC Will Maintain Current Output Increases
Oil trading was mixed on Tuesday, as investors waited to see if the Organization of the Petroleum Exporting Countries (OPEC) would sanction another 400,000 barrel per day increase for March when the cartel meets on Wednesday.
West Texas Intermediate rose 5 cents to settle at $88.20 per barrel, and Brent dropped 10 cents to $89.16 per barrel.
Despite most analysts assuming that OPEC will stay on course, Goldman Sachs Group Inc. warned that the cartel may deliver more than expected due to the recent price surge.
Analysts including Damien Courvalin, Callum Bruce, and Jeffrey Currie wrote in a report, "We view growing potential for a faster ramp-up at this meeting, given the pace of the recent rally and the likely pressure from importing nations.
"The producers' group may also be growing more concerned by the hawkish central bank shift that could lead to slower global growth and oil revenues later this year."
The bank maintained that crude will hit $100 per barrel this year and that considering the enormity of global demand there's a need for sharply high prices.
Jim Ritterbusch, president of Ritterbusch and Associates, disagreed that OPEC would make any surprise moves: "The Saudis will likely avoid any major adjustments, as they have proven adept in recent years at treading a fine line in manoeuvring global pricing in their preferred direction."
Meanwhile, Exxon Mobil Corp. on Tuesday said it plans to boost output by 25 percent this year in the Permian Basin; the announcement comes on the heels of Chevron Corp. announcing it will increase its own Permian supplies by 10 percent.
Artem Abramov, an analyst at Rystad Energy, pointed out that Exxon and Chevron "are resuming the ambitious growth plans of three to four years ago that were delayed by the pandemic"; however, Elisabeth Murphy, analyst at ESAI Energy, remarked: "U.S. production may surprise to the upside this year, but not by so much that it will significantly bring down oil prices; on top of that, OPEC+ is having trouble lifting output to add the additional barrels."
Exxon on Tuesday also reported a fourth-quarter profit of $8.87 billion, its largest in seven years.
