OPEC will maintain voluntary production cuts until at least the end of July

Anonymous sources within OPEC revealed on Sunday that some OPEC members and allies, led by Russia, have reached an agreement to extend voluntary oil production cuts from the first quarter to the second quarter of 2024.

These cuts, initially totaling around 2.2 million barrels per day (bpd), were approved by OPEC+ in November, with Saudi Arabia leading by example by extending its own voluntary reduction. OPEC+ has implemented successive production reductions starting in late 2022 to stabilize the market following increased production from non-member producers, such as the United States, and demand concerns due to rising production rates. interest in major economies. OPEC monitor Amena Bakr confirmed the news in a short tweet on Sunday:

OPEC extends voluntary cuts for another quarter #OOTT #opec

— Amena Bakr (@Amena__Bakr) March 3, 2024

Oil analysts, for the most part, had expected the extension. While some commentators argued that some OPEC+ members would seek to increase supply with a Brent price above $80, it appears that OPEC+ remains cautious in reporting additional supply due to demand uncertainty in China.

Looking ahead, the next OPEC meeting in June will provide guidance on how OPEC perceives demand growth in Asia in late 2024 and into 2025. So far the producer group has managed to align its interests, but maintain this units could become more difficult if the expected increase in demand materializes later in the year.

If there was no recovery in demand or even an increase in production in non-OPEC countries, at this point the quota cut would lose its effect.

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The article OPEC will maintain voluntary production cuts until at least the end of July comes from Economic Scenarios .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lopec-manterra-i-tagli-volontari-alle-produzione-almeno-fino-a-fine-luglio/ on Mon, 04 Mar 2024 07:00:10 +0000.