OPEC+ to boost output in March by 0.4m b/d, as expected

The Organisation of the Petroleum Exporting Countries and its main allies, or OPEC+ as they are collectively known, will raise their combined output of crude oil in March as expected.

At their meeting on Wednesday, OPEC+ energy ministers agreed to go ahead with their previously announced plan to boost production by a total of 400,000 barrels per day to approximately 41.294m.

In an immediate reaction, front month Brent crude oil futures were standing 0.83% higher on the day at $89.89 per barrel.

Commenting on the OPEC+ decision, Capital Economics commodities economist, Edward Gardner, said the decision to raise output was "hardly surprising".

"What matters going forward is whether OPEC+ can keep up with its planned production increases. In recent months it has struggled to do so, and in December the core OPEC-10 group raised supply by just 166,000 bpd, below its planned increase of 250,000 bpd. If OPEC+ continue to under-produce, it is possible the group will schedule slower production increases this year. But with prices so high, there is an incentive to instead re-configure the scheduled increases, allowing countries with greater spare capacity like Saudi Arabia to raise production faster, but this could prove difficult to agree on.

"Whatever OPEC+ decides to do, we think it will still raise production by a significant margin this year and contribute to the global oil market shifting to a surplus. This underpins our forecast of oil prices falling, with Brent finishing the year at $70 pb."