What Happened
OPEC+ declined to modify its current production plans despite oil prices hitting $80 per barrel last week for the first time since 2018, the international oil bloc announced on Sept. 4. OPEC+ will continue boosting production by 400,000 barrels per day through the end of 2021.

Why It Matters
OPEC+ decided to maintain its conservative approach to increasing production because it is enjoying high oil prices. Its decision will keep oil markets tight and could lead to oil prices rising beyond $80 per barrel, particularly when coupled with similarly tight liquefied natural gas and natural gas markets. Higher prices will result in more political pressure on OPEC+ to change its production strategy for December at its Nov. 4 meeting.

Background
Directly following the OPEC announcement, European benchmark Brent rose more than 3%, briefly hitting $82 per barrel. Last week, Goldman Sachs increased its Q4 price outlook for Brent from $80 to $90 per barrel. Bank of America also warned last month that prices could hit $100 billion if the Northern Hemisphere’s winter this year is particularly cold.