OPEC+ is anticipated to extend its current oil output cuts through the end of the first quarter during its upcoming meeting on Thursday, according to four sources familiar with the discussions. This move aims to bolster support for the oil market amid ongoing challenges.
Key Highlights:
Output Cut Extension:
Sources indicate that OPEC+ is likely to prolong its latest round of cuts to provide additional market support.
The group, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, is scheduled to meet on Thursday to finalize its output strategy.
Current Market Conditions:
Despite ongoing supply cuts, the global oil benchmark, Brent crude, has fluctuated between $70 and $80 per barrel this year, trading around $72 on Monday after reaching a low of below $69 in September.
OPEC+ is currently withholding 5.86 million barrels per day from the market, roughly 5.7% of global demand, as part of its strategy to stabilize prices.
Challenges to Production Plans:
A planned output increase of 180,000 bpd from eight members, originally set for January, has been postponed from October due to declining prices.
The group has been gradually working to unwind output cuts through 2025, but slowing global demand and increasing production outside of OPEC+ present significant hurdles.