ALBAWABA - OPEC+ has announced a plan to wind down its oil supply curbs over the next 12 months, after extending them through the third quarter, ought to potentially bring some price support, as reported by Bloomberg, yet perhaps not sufficient to satisfy traders who had been hoping for a lengthier extension.
The agreement is mostly preliminary and will be reviewed, and the group could alter its decisions if necessary, according to a statement from Saudi Arabia, where the meeting was held in conjunction with video conference in a switch from the original plan for Vienna as the group moves for more discrete talks.
The price barrel price of Brent crude oil has been hovering around $80 recently, which is less than what many OPEC+ countries require for balancing their budgets, according to Reuters, with concerns about the sluggish development of demand in China, along with growing oil reserves in rich nations keeping prices elevated.
Since late 2022, members of OPEC+ have reduced their supply significantly multiple times, now reducing their production by 5.86 million barrels per day, 3.66 million bpd of cuts ending in 2024-, and eight-members’ voluntary reduction of 2.2 million bpd expiring in June 2024. Over the span of a year, starting October 2024 through September 2025, OPEC+ plans to progressively phase down the 2.2 million bpd of reduction.
“We are waiting for interest rates to come down and a better trajectory when it comes to economic growth [...] not pockets of growth here and there," Saudi Energy Minister Prince Abdulaziz bin Salman stated to reporters, as Reuters notes.
