A Deal Was Done

WTI and Brent continued to benefit from the OPEC+ group of producers reaching a short-term production agreement on Thursday. The major crude benchmarks currently sit $0.70 & $0.90 above their respective settlement levels, after registering fresh multi-month highs.

• As a reminder, the OPEC+ group of producers was ultimately unable to flesh out a long-term production plan. As a result, the group agreed to lift cumulative output by 500K bpd during the month of January and will conduct monthly meetings to decide on output levels (which could provide flash points in the coming months).
• Participating Energy Ministers noted that each monthly adjustment will not exceed 500K b/d in either direction (meaning that supply can still be removed from the market), with the arrangement set to remain in place until the cumulative production rise reaches 2mn bpd vs. current levels.
• The facilitates that account for previous undercompliance re: the deal were extended through March.