Analysis: OPEC+ in driver’s seat as oil supply growth lags demand

The surprise oil output cuts announced on Sunday by OPEC+ members illustrate their greater power over the market,

given limited supply growth by other producers such as U.S. shale firms and still-growing demand despite the energy transition.

Oil has jumped to $85 a barrel since members of the Organization of the Petroleum Exporting Countries and allies including Russia announced production cuts of about 1.16 million barrels per day (bpd), adding to curbs already in place.

While OPEC or OPEC+ decisions to cut output in the past have drawn warnings that higher prices and lower OPEC+ output would encourage U.S. shale producers to pump more, officials have not voiced such concerns recently.

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