OPEC+ meeting to decide on future oil output cuts amid market hurdles
(MENAFN) Yesterday's OPEC+ alliance meeting drew the attention of global energy markets, with decisions made regarding current production cuts and strategies for reductions through 2024. Originally planned as a semi-annual gathering in Vienna, the meeting transitioned to an online format last week, although some members were requested to travel to Riyadh, Saudi Arabia. The virtual meeting commenced at 11 GMT.
Anticipations were high regarding an agreement to extend oil production cuts through the third and fourth quarters of 2024, possibly extending into 2025. The goal is to stabilize the market amidst sluggish global demand growth and increasing competitive production from the United States. Oil prices have been hovering around USD80 per barrel, lower than many OPEC+ members' budget requirements. Concerns over slow demand growth in China, the world's largest crude importer, further influenced the market sentiment. Analysts expected the OPEC+ alliance to extend cuts to ensure oil supply balance.
Since late 2022, the alliance, comprising the 12-member Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, has implemented significant production cuts totaling 5.86 million barrels per day, approximately 5.7 percent of global demand. This includes 3.66 million barrels per day from OPEC+ members, with cuts in effect until the end of 2024, and an additional 2.2 million barrels per day in voluntary cuts from some members, set to expire at the end of June.
The group convened with a focus on supporting the market amid persistent challenges, including sluggish growth in global demand and competitive pressures from increased American oil production.
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