Crude oil prices steadied in Asian trading before an OPEC+ meeting which the market expects the alliance to another production boost next month.
Crude oil futures in New York held around $76 a barrel after rising 1.2% Monday. The OPEC+ alliance is expected to move away from 400,000-barrel a day output increase for February when it meets later Tuesday. The group will add more supply despite some concerns about demand following Covid-19 flare-ups across the world including in China, the biggest crude importer.
The supply-demand backdrop is looking better for OPEC+, with the cartel cutting estimates for a surplus expected in the first quarter due to weaker output growth from its rivals. Oil’s market structure has also firmed in a bullish backwardation pattern, even as the omicron strain of the virus turbocharges infection rates across the world.
The OPEC+ Joint Technical Committee, which analyzes the market on behalf of ministers, sees a surplus of 1.4 million barrels a day in the first three months of 2022, about 25% less than it estimated a month ago, according to a report seen by Bloomberg.
