Oil: Fine-tuning at OPEC+ rather than major changes – Commerzbank

At the semi-annual OPEC+ meeting, the focus is expected to be more on details rather than a change in the short-term production strategy. Oil prices are unlikely to be significantly affected by this. Peace talks remain the key focus, Commerzbank's commodity analyst Barbara Lambrecht notes.

OPEC+ aims to remain strong as an alliance

"Hopes for an end to the war in Ukraine have put pressure on oil prices: A ceasefire would likely stop mutual attacks on energy infrastructure, and sanctions might be eased or even lifted. However, it seems unlikely that the parties will quickly agree on a peace plan. As a result, Brent crude oil prices have stabilized in the middle of their trading range between USD 60 and 65 per barrel, which has been in place since early October."

"Sunday's semi-annual OPEC+ meeting is also unlikely to deliver any major new drivers for the market. The production targets for member states are largely fixed until December 2026. Additionally, the eight producer countries that implemented voluntary production cuts have already confirmed that they will not increase production in the first quarter. Thus, the short-term production strategy is not on the agenda."

"If OPEC+ restricts a member country too heavily, there is a risk that the country could leave the cartel — something that happened with Angola two years ago. As a result, a compromise by other member states, such as a slight quota increase for Iraq, cannot be ruled out. Ultimately, OPEC+ aims to remain strong as an alliance."