Energy sector investors are preparing for potential volatility as the OPEC+ alliance, comprising OPEC nations and key partners like Russia, considers ending its production freeze. Sources indicate the group favors resuming output increases starting in April, with a key meeting of eight member nations scheduled for March 1.
Market Context and Price Action
Crude oil benchmarks ended the prior week with modest daily gains but registered weekly losses. Brent crude settled at $67.75 per barrel, while West Texas Intermediate (WTI) hovered near $62.89. Analysts note a lingering geopolitical risk premium of $5–$7 per barrel, but warn that additional OPEC+ supply could pressure prices in the near term.
Major integrated oil companies had a mixed session. Exxon Mobil (XOM) shares declined 1.0%, while Chevron (CVX) advanced 0.7% and ConocoPhillips (COP) gained 0.6%. Refiners outperformed, with Marathon Petroleum (MPC) rising 2.6% and Valero Energy (VLO) adding 1.6%.
Supply and Demand Dynamics
Beyond OPEC+, supply factors are evolving. The U.S. Treasury issued licenses easing some energy sanctions on Venezuela, permitting Chevron, BP, Shell, and others to operate under specific conditions, with payments directed to a U.S.-controlled fund.
On the demand side, the International Energy Agency (IEA) recently reduced its 2026 global oil demand growth forecast to 850,000 barrels per day, citing economic uncertainty and higher prices. The agency projected a supply surplus of 3.73 million barrels per day for the year.
Contrasting this view, Vitol's CEO suggested the market is tightening due to sanctions affecting Russian and Iranian flows, forcing buyers to seek alternatives.
Looking Ahead
Traders face a shortened week with U.S. markets closed for the Presidents Day holiday. The upcoming OPEC+ decision will be a focal point, with the outcome likely to influence crude prices and the cash flows of major producers. The interplay of increasing supply signals and tempered demand growth presents a complex landscape for energy equities in the coming weeks.
