OPEC+ decides to add 4 lakh bpd despite price plunge, mounting surplus

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Biznextindia : Despite price plunge and  mounting evidence of a larger than expected oil surplus next year, the OPEC+ countries have decided to ease production cuts in January by 4,00,000 barrels per day.

The decision was taken at the 23rd OPEC and non-OPEC ministerial meeting held through video-conferencing on 2nd December.

The ministers also agreed on an extension of the compensation cuts.

“Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th ONOMM and the decision to adjust upward the monthly overall production by 0.4 mb/d for the month of January 2022, as per the attached schedule” OPEC+ said in a statement.

“Extend the compensation period until the end of June 2022 as requested by some underperforming countries and request that underperforming countries submit their plans by December 17, 2021. Compensation plans should be submitted in accordance with the statement of the 15th ONOM” it added.

Before the meeting, OPEC+ was said to be expecting a worse-than-previously expected surplus in the first quarter of 2022.

This is the first OPEC+ ministerial meeting after the planned release of millions of barrels of oil from strategic reserves by top oil importing nations including USA, India and China.

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