FILE PHOTO: The OPEC logo is seen in this image from October 8, 2023. Portal/Dado Ruvic acquires license rights
- Producers meeting to discuss 2024 production
- Saudi Arabia plans to cut by more than 1 million barrels per day, Russia wants cut by 500,000 barrels per day – source
- November 26 meeting postponed due to disagreement
LONDON/MOSCOW/DUBAI, Nov 30 (Portal) – OPEC+ oil producers agreed on Thursday to production cuts of nearly 2 million barrels per day (bpd) for early next year, led by Saudi Arabia extending its current voluntary cut continues, delegates told Portal.
Saudi Arabia, Russia and other members of OPEC+, which produce more than 40% of the world’s oil, are holding a virtual meeting on Thursday to discuss 2024 production amid fears the market will face a possible surplus could.
Its production of about 43 million bpd already reflects cuts of about 5 million bpd intended to support prices and stabilize the market.
OPEC+ sources told Portal the latest deal would involve cuts in the order of 2 million bpd, including Saudi Arabia extending a voluntary 1 million bpd cut in place since July.
Russia will cut output by 500,000 bpd and others will also contribute to cuts, a source said.
Benchmark Brent crude futures rose 1.2% to over $84 a barrel at 1526 GMT on Thursday, on track for a third day of gains on expectations of new OPEC+ cuts.
Helima Croft, an analyst at RBC Capital Markets, previously said Saudi Arabia, which began voluntarily pledging 1 million bpd in July, does not want to shoulder further cuts alone.
“We could imagine a scenario where Russia and Saudi Arabia extend their cuts until the first quarter of 2024 and put together a coalition of willing individual producers ready to make voluntary adjustments,” she added.
The focus is on lower production, with prices down from nearly $98 at the end of September and concerns brewing about weaker economic growth in 2024 and expectations of a supply surplus.
The International Energy Agency (IEA) this month predicted a slowdown in demand growth in 2024 as “the final phase of the pandemic-driven economic recovery fades and increasing advances in energy efficiency, expanding electric vehicle fleets and structural factors reassert themselves.”
Still, OPEC+ sources said this week that discussions had proven difficult, as evidenced by the postponement of the group’s meeting scheduled for November 26. Sources said the delay was due to disagreements over production quotas for African producers.
The OPEC+ meeting coincides with the opening of the COP28 United Nations climate summit, hosted by OPEC member United Arab Emirates.
Reporting by Alex Lawler, Olesya Astakhova, Maha El Dahan and Ahmad Ghaddar; Editing by Jason Neely
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