The 25th OPEC and non-OPEC Ministerial Meeting (OPEC+) will be held today.
Typically held in in the first week of each month, the OPEC+ meeting comes as oil prices have reached a seven-year high this past week. Officials will review OPEC+ member conformity with oil output adjustment commitments and look to adjust future output in relation to oil market forecasts for 2022. Under continued pressure from countries suffering from high oil prices, like India, OPEC+ will likely commit to increasing output by 400k barrels a day in March or by the end of April.
Though oil futures have lowered in anticipation of OPEC+ extending supply increases, prices are likely to remain high in the medium-term given already low levels of inventory and spare capacity. Additionally, recent production increases have resulted in past conformity issues in nations like Nigeria and Angola and can effectively negate much of OPEC+’s supply increases.
In the short-term, gasoline prices may rise further as oil production and supply chain issues combine with approaching warmer weather. However, while demand for oil continues to rebound from pandemic lows, expect prices to drop over the second half of 2022 as both the US and OPEC+ will likely increase production.
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Scott is an Analyst at Foreign Brief and works in International Development in Washington DC. His specific interests are geopolitics, regional conflict and governance, and political and economic development, and his geographic focus is Sub-Saharan Africa.