The Organization of the Petroleum Exporting Countries and its allies decided on Thursday to keep a tight rein on production, sticking with its current quotas for April with some exceptions.
The news from the group known as OPEC Plus caused a jump in oil futures. Brent crude was up by almost 5 percent, to $67.24 a barrel.
The outcome represents a win for Saudi Arabia, which had counseled against raising production because recovery from the pandemic is still uncertain.
“The right course of action is to keep our powder dry,” said Prince Abdulaziz bin Salman, the Saudi oil minister at the beginning of the group’s meeting on Thursday. “Let us be certain that the glimmer we see ahead is not the headlight of an oncoming express train.”
Russia, which has been pushing hardest for increases, will be allowed a small boost of 130,000 barrels a day while Kazakhstan was granted a 20,000 barrel a day boost.
Before the meeting, some analysts said the market was already in balance and that there was room for additional production without undermining prices. After collapsing last spring, oil prices have risen to pre-pandemic levels in recent weeks.
Vaccination programs against the coronavirus are gathering pace, potentially leading to increased economic activity and greater demand for oil this year. In addition, production growth from shale producers in the United States is expected to be restrained this year.
Petroleum heavyweights that are curtailing production, like Russia and the United Arab Emirates, would like to put some of that oil back on the market. On the other hand, Saudi Arabia, OPEC’s de facto leader, continues to urge caution while apparently seeking even higher prices.
After January’s OPEC meeting, Saudi Arabia voluntarily agreed to cut its own production by one million barrels a day, to about 8.1 million barrels a day. That cut had been scheduled to expire in April, but on Thursday Saudi officials said they would continue it for at least another month.
The outcome of Januarys meeting was an unusual compromise that allowed modest increases by Russia and Kazakhstan. Evvel again, the group has reached a somewhat awkward deal, figuring that despite disagreements it is better to present at least a facade of unity.