By Barani Krishnan

Investing.com – Meet once a month to mitigate any selloff and keep a barrel above $100 by stating cursory production hikes that won’t be met anyway — OPEC+ executed to perfection another scripted monthly move on Thursday that pulled crude prices from recent lows forced by China’s Covid situation and worries over U.S. growth.

crude, the London-traded global benchmark for oil, was down 60 cents, or 0.5%, at $109.54 a barrel by 11:55 AM ET (16:55 GMT) after the May meeting of OPEC+ agreed to a standard production hike of 432,000 barrels per day that has become inconsequential to the market’s supply-demand picture.

New York-traded WTI (the benchmark U.S. crude oil) was 0.8% lower at $106.91.

Prices had rallied earlier in the session and came off after Brent peaked at nearly $114 and WTI rose to above $111 — just above their recent resistance. Crude prices started the week on weak footing, with Brent struggling to hold at $103 and WTI almost falling to below $100, as the U.S. crude benchmark threatened to reprise last week’s lows of around $95.

OPEC+ was able to increase crude oil prices at all its meetings in the past year. They offered a small rise of 400,000 barrels per daily in monthly production, despite a high market demand. This is after Covid 2020’s disruptions.

The alliance — made up of the 13 original members of the Saudi-led Organization of the Petroleum Exporting Countries and 10 other oil-exporting nations steered by Russia — has invariably produced less than what it pledged month-after-month, adding to the crude rally.

On Thursday, Saudi Arabia and the United Arab Emirates — the biggest producers in OPEC+ sans the sanctioned Russia — affirmed their intent again to pump oil at well below their capacity while Europe inched toward a full ban on Russian energy products and amid supply blockades in Libya.

“OPEC has fallen short of even hitting their previous quotas and it’s another bullish factor as many people question (its) ability to raise production with turmoil in Libya and the growing move to (further) sanction Russian oil,” said Phil Flynn, energy analyst at the Price Futures Group commodity brokerage in Chicago.

The EU embargo could force Russian oil exporters into rerouting flows to Asia, cutting production sharply and allowing the European bloc to try to fight for any remaining supply around the globe. Analysts predict that the developments will keep crude oil prices above $100 per barrel.

Reuters, citing information from two sources at Thursday’s OPEC+ meeting, said delegates to the talks completely avoided any discussion about sanctions on Russia, wrapping up discussions in near record time of just under 15 minutes.

“OPEC+ continues to view this (Russian embargo) as a problem of the West’s own making and not a fundamental supply issue that it should respond to,” Callum Macpherson from Investec said in comments carried by Reuters.

Macpherson pointed out that only Saudi Arabia or the United Arab Emirates were able to significantly increase supply. He added: “If they did so, the ensuing fallout with Russia could lead to an end to OPEC+.”

Mohammad Barkindo (OPEC Secretary General) stated Wednesday that Russian exports exceed 7 million bpd. He stated that “the spare capacity simply does not exist.”

Oil prices rose after the Energy Information Administration’s Wednesday weekly inventory data showed that crude oil stockpile in America’s emergency crude reserve was at an 20-year low. The Biden administration continues to supply oil from this spot to a market starved of it.