Olesya Astakhova, Ahmad Ghaddar and Alex Lawler

LONDON, (Reuters) – OPEC+ is likely to stick with existing policies for moderate output increases Wednesday. Five sources within the producer group stated that this was despite anticipating that demand will rise further in 2018 and oil prices trading near their highest level since 2014.

This group includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia. It produces more than 40% of the world’s supply and has been under pressure from India and the United States to increase production to support the recovery of the economy from the pandemic.

OPEC+ however has refrained from agreeing to accelerate increases. They argue that the global energy shortage is due to badly calculated energy transitions to cleaner fuels by consuming states.

Many OPEC members are having difficulty pumping in line with their quotas because of underinvestments over the last few years.

Five OPEC+ source told Reuters Tuesday that they expect ministers to approve a March increase of 400,000 barrels/day despite rising oil prices.

“The question (of faster increases) didn’t come up, and I doubt that it will,” said an OPEC+ source. He asked if the OPEC+ expert panel had considered a rise of over 400,000 bpd during its Tuesday meeting.

A report by the Joint Technical Committee, also known as JTC, was released Tuesday and showed that Reuters had seen it. It maintained the global oil demand growth projections for 2022 at 4.2 Million bpd.

According to the company, demand is expected to return to pre-pandemic levels by the end of the year. The peak oil demand in 2019 was just above 100 million barrels per second.

It was still forecast that the crude oil surplus would reach 1.3million barrels per day by 2022, which is slightly below its original prediction of 1.4million.

The report stated, however, that there remain a few risks over the oil markets, such as “significant uncertainties” related to Omicron coronavirus variant’s potential effect, continuing supply chain bottlenecks, and central bank policy against inflation.

JTC identified other threats to oil market recovery. These included volatility in commodity markets and restraints in oil production capacity due to underinvestment. The JTC also highlighted the challenges of high sovereign debt levels across many regions as well as geopolitical dangers.

Prices hovered around $89 per barrel on Tuesday. They were not too far away from last week’s seven-year record of $91.70, which was largely driven by geopolitical tensions. [O/R]

Goldman Sachs (NYSE) stated in a note that there is a possibility of a quicker OPEC+ increase given the recent market rally.

(This story rewrites paragraph 2 to correct typos 3).