OPEC+ considers maintaining oil production cut reductions amid uncertain market dynamics
(MENAFN) Sources within the OPEC+ alliance have disclosed that Saudi Arabia has extended invitations to oil ministers from member countries to convene in Riyadh for a policy meeting scheduled for Sunday, June 2nd. The meeting aims to deliberate on a complex agreement that may potentially prolong the reduction in oil production until 2025. Almasadam Satkaliyev, advisor to Kazakhstan's Minister of Energy, confirmed Minister Satkaliyev's attendance at the meeting in Riyadh, indicating a significant level of engagement from member states. However, the precise number of attending ministers beyond Satkaliyev remains undisclosed.
The OPEC+ alliance, comprising the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and its allies, notably Russia, has been implementing a series of production cuts since late 2022 in response to escalating production from non-member countries, particularly the United States. Presently, the cumulative OPEC+ cuts amount to 5.86 million barrels per day, which constitutes approximately 5.7% of global demand. These cuts include 3.66 million barrels per day from OPEC+ members, slated to remain effective until the conclusion of 2024, alongside voluntary cuts of 2.2 million barrels per day from select members, set to expire by the end of June.
While oil prices have experienced an upward trajectory in the current year, concerns surrounding demand fluctuations and the potential impact of heightened interest rates have introduced a degree of uncertainty into the market sentiment. Notably, not all oil ministers are anticipated to physically attend the meeting in Riyadh, which is officially scheduled to be conducted online. A series of preliminary discussions among oil ministers is expected to commence at 10:00 GMT today, signaling an ongoing dialogue regarding the pertinent issues facing the oil market.
This development marks the second instance of a change in the meeting format, with the OPEC+ alliance initially intending to convene at OPEC headquarters in Vienna before opting for an online format. As the alliance navigates the evolving dynamics of the global oil market, the forthcoming discussions in Riyadh hold significance in shaping the future trajectory of oil production and supply management strategies.
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