OPEC+ producers have decided to keep their production levels unchanged until March. There are small differences, with Kazakhstan, Iraq, and Russia slightly varying from the set production targets. Saudi Arabia has lowered its official selling prices for the third month in a row. This new pricing puts the premium for Arab Light Crude at the lowest level in five years, now just 30 cents above the Oman/Dubai benchmark in Asia.

OPEC Meeting Decisions

OPEC+ producers met briefly over the weekend to confirm their plan to maintain steady production. We expect this decision to be confirmed again at their next meeting in early February. In November, Kazakhstan and Iraq produced more than their targets, while Russia produced less. Overall, the total shortfall from the planned output was modest at 140,000 barrels per day, according to IEA data. The limited capacity for increased production matches with Saudi Arabia’s price cuts. The lower premium shows that oil supply gains are restricted amid ongoing adjustments in prices. With OPEC+ set to keep production steady until the end of March, we don’t see any reason for a major price increase in the near term. This decision was anticipated, which means we can expect a period of price stability or possibly weakness. The market now has a clearer understanding of supply fundamentals for the first quarter.

Saudi Arabia Price Cuts

A key indicator is Saudi Arabia reducing its official selling prices for the third month running. This keeps the premium for Arab Light at a five-year low, showing that they are competing for market share in Asia. It also hints that the demand isn’t strong enough to handle the current output at higher prices, which is a concerning sign. Recent data supports this view, revealing an unexpected increase in U.S. crude inventories. The latest EIA report noted a surprise rise of 1.8 million barrels. Additionally, China’s manufacturing PMI data from last week pointed to a slowdown, raising worries about global oil demand growth in the upcoming months, which aligns with Saudi pricing strategies. We saw a similar situation in the fourth quarter of 2025, where worries about a slowing global economy kept prices from rising, despite ongoing geopolitical tensions. That period showed us that weak demand can overshadow supply-side concerns. This historical context adds to our cautious outlook now. In the coming weeks, this suggests a good strategy for crude oil futures could be to sell out-of-the-money call options to collect premiums, as price increases seem limited. It would be wise to establish positions that benefit from prices remaining below key resistance levels, like $80 for Brent. This tactic gains from both price stagnation and the passage of time. We must stay alert for unexpected developments in geopolitical hotspots that could quickly change supply expectations. Traders should also watch for upcoming inflation reports from the U.S. and Europe; any signs of robust economic performance could alter demand expectations. The next OPEC+ meeting in early February will be a significant date to watch for any policy changes. Create your live VT Markets account and start trading now.

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