OPEC+ intends to prolong oil output cuts amid market support, geopolitical tensions


(MENAFN) According to three sources within the OPEC+ alliance who spoke with Reuters, there are deliberations underway regarding the extension of voluntary oil production cuts into the second quarter of 2024. The purpose of such an extension would be to offer additional support to the oil market, which has seen price fluctuations amidst various geopolitical tensions. Notably, two of the sources indicated that there's a possibility these cuts could be prolonged until the end of the year.

This move follows the agreement made in November, where OPEC+ members committed to voluntary cuts amounting to approximately 2.2 million barrels per day throughout the first quarter of the current year. Noteworthy among these commitments was Saudi Arabia's decision to prolong its voluntary reduction in production.

One of the factors buoying oil prices this year has been the escalation of geopolitical tensions, notably highlighted by the Yemeni Houthi movement's attacks on commercial ships in the Red Sea. These incidents have contributed to the market's volatility, with Brent crude hovering around USD83 per barrel as of recent trading sessions.

An unnamed source within OPEC+, speaking to Reuters under the condition of anonymity, suggested that extending production cuts into the second quarter appears "likely." Furthermore, there's speculation among two of the sources that extending these cuts until the end of the year remains a viable option.

As of the beginning of April, the total production cuts under the current agreement are set to reach 3.66 million barrels per day. Saudi Arabia has indicated its willingness to continue these cuts beyond the first quarter if deemed necessary.

However, it's worth noting that despite these discussions among sources within OPEC+, the matter has not yet been officially addressed within the alliance.

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