This Wednesday oil producer block OPEC will meet to discuss new production targets amid uncertainty over the markets direction.
OPEC came under fire last week as the IEA stated that some producing countries were being “unhelpful” while a group of several major oil consumers including the US and China tried to lower prices through releases from strategic reserves.
Prices are also under downward pressure as the world assesses the potential risks of the new Omicron Covid-19 variant.
OPEC has a stated policy of incrementally producing an additional 400,000 barrels per day each month. This policy is open to revision during the meeting, but the bloc has shown little appetite for upping supplies.
A report from JP Morgan has noted that prices will go to $125 barrels per day in 2022 and $150 barrels per day in 2023 as OPEC finds itself technically incapable of increasing supply due to lack of spare capacity because of underinvestment.
Brent Crude was down 3% to $71.15 per barrel in trading on Tuesday.
By Feike de Jong