OPEC+ extends production cut to end of 2024

They also agreed on the following: internal quota allocation As of January 1, 2024, the group will leave its aggregate bid at 40.46 million barrels per day (mdb), according to the final announcement of this Sunday’s ministerial meeting.

Thus, both the 2 mbd cut adopted in October 2022 and a large part of the voluntary reductions of 1.66 mbd announced in April remain in effect and have not had the desired effect so far. raise the price The price of crude oil is more than $80/barrel.

fear of recession

Delegates came together in such an atmosphere. uncertainty about the global economy, with few negative economic indicators for crude oil demand. Crude oil producers flocked to this enclave at a time when the impact of inflation, monetary tightening by major banks, a less-than-expected recovery in Chinese demand, and various turbulences affecting the financial system threatened the market.

This meeting took place two months after some countries in this cartel announced that they were voluntarily cutting production quotas to increase prices; This decision took effect in May, but its effect was short-lived and did not stop prices from falling. .

Although oil prices have recovered in the last two days, prices fell 10 percent Since the surprise announcement at the beginning of April.

Brent, which is a reference in Europe, is trading at $ 76 a barrel. and the US mark WTI are trading at $71 a barrel, far from the levels it reached around $140 a barrel at the start of the war in Ukraine in March 2022.

tough negotiation

The meeting at OPEC headquarters began about three hours after schedule, and negotiation between these 23 countries has been tough. Responsible for 60% of world crude oil production.

An important issue in the negotiation was the production base, as it is used to calculate pumping quotas per country and thus to structure a common cut.

This United Arab Emiratesdefending, more productionmanaged to increase the base on which pumping quotas are calculated.

This increase, according to the Bloomberg agency, reluctance from African countries Their quotas for the next year have been reduced, as have Angola, Congo and Nigeria. These African countries are producing at full capacity, but are barely meeting their production targets and are currently under additional pressure.

Saudi Arabia downgrades its bid

Also, prior to the appointment, there was speculation as to whether it was. Saudi Arabia and Russia would clash because of their differences and divergent interests.however, the OPEC+ meeting closed with a united front.

Russia does not want to turn off the oil tapincome for Moscow. to finance the military offensive. Due to Western powers’ sanctions, Russian crude can only be traded for $60 or less.

“In contrast, Saudi Arabia needs higher prices to balance its budget,” Commerzbank analyst Barbara Lambrecht said. In this sense, the Russian minister was frank: “We have no disagreements. This is a joint decision taken in the interests of the market.”

Saudi Arabia has taken a decision on this issue. reduce crude oil supply by one million barrels per day From next July 1, a “voluntary” cropping That it will implement as well as continue to comply with the pumping restrictions it has committed to in OPEC+.

This was announced by Saudi Energy Minister Abdelaziz bin Salman at a press conference after attending the conference.

next ministerial conference Organization of Petroleum Exporting Countries (OPEC) and its ten allies, led by Russia Called for the next 26 November.