Overview of the logo of the Organization of the Petroleum Exporting Countries (OPEC) headquarters in Vienna, Austria, February 29, 2024.
Thomas Kronsteiner | Getty Images News | Getty Images
Members of the OPEC+ oil alliance have postponed plans to increase production by 180,000 barrels per day in October as part of a plan to gradually restore 2.2 million barrels per day to the market over the next few months.
Plans to increase output have been delayed by two months, two OPEC+ sources said, speaking only on condition of anonymity due to the sensitivity of the negotiations.
The 2.2 million barrels per day production cut implemented in the second and third quarters is due to expire at the end of this month. The production cuts, carried out by Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates, are voluntary and not an official policy binding on all members of the OPEC+ alliance.
OPEC Secretariat confirms eight countries will extend production cuts of 2.2 million barrels per day in a statement late Thursday. These restrictions will be phased out starting in December this year and continuing until November 2025.
Crude oil futures, which plunged earlier this week, recovered on Thursday, with the Brent crude contract expiring in November trading at $73.63 a barrel at 3:29 pm London time, up 1% from the previous settlement price. The October front-month contract on the New York Mercantile Exchange was at $70.17 a barrel, up 1% from the previous closing price.
According to official policy, OPEC+’s total output next year will reach 39.725 million barrels per day. Some members of the group will each cut production by a further 1.7 million barrels per day during 2025, also on a voluntary basis.
An OPEC+ source said the details and timetable of the deals had not been adjusted as a result of the latest talks.
A slow recovery in demand from China, the world’s second-largest economy and most important crude oil importer, after Covid-19 has weighed on oil prices. On the supply side, output from key OPEC+ members Iraq and Kazakhstan has repeatedly exceeded monthly quotas stipulated in the alliance agreement, and Submitted plan Further production cuts are due by September 2025 to compensate for these excesses.
Power outages in North African OPEC member Libya also confounded supply and demand fundamentals. Continued market uncertainty Can the political deadlock, which threatens the country’s nearly 1.2 million barrels per day output, be resolved immediately or continue in the long term?
