Problems Surface Within OPEC+
January 29, 2021
The energy markets are trading higher this morning without much news. It is Friday and it is likely traders are covering their positions for the weekend. They are likely getting things done early so they can rest easy as the craziness of the markets on all the Game Stop activities has gotten a lot of attention and has made traders cautious about all things markets.
According to a report by Abu Dhabi Commercial Bank, increasing infighting between OPEC+ members could make futures meetings on production policy increasingly difficult. The bank said, “finding the right balance between supporting the oil price and increasing output remains a critical and contentious point of debates, especially with almost all the oil-producing countries having spare capacity that can be tapped immediately if necessary.” One OPEC+ source, who sport on condition of anonymity, said the group’s infighting has reached new levels of fervor, with increasing pressure to raise output coming from the UAE and Iraq.
The Department of Transportation reported that vehicle miles traveled on US highways fell by 2.9% to 13.1 billion miles in the week ending January 24th. Passenger vehicles miles were down 11% from 2019 levels.
China’s authorities have taken steps to dissuade travel around the Lunar New Year to contain the spread of the coronavirus. Officials predict Chinese citizens will make 1.7 billion trips during the travel rush, down 40% from 2019. Travel in 2020 was curtailed due to the coronavirus. Chinese road and air travel mobility data are declining into the Chinese New Year due to the travel restrictions and an increase in coronavirus infections.
Russia’s Deputy Energy Minister, Pavel Sorokin, said domestic oil producers have agreed to raise refining volumes in February to meet demand. He said oil exports will fall amid higher domestic refining. He said Russia is aiming to keep fuel price growth within inflation levels.