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Thursday, February 29, 2024

OPEC+ looking at deeper oil cuts ahead of Thursday’s meeting

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The OPEC+ alliance of oil-producing countries is considering deeper cuts to its oil output ahead of a crucial meeting on Thursday, according to sources and analysts.

The group, which includes OPEC members and other major producers such as Russia, had agreed in April to reduce their collective output by 9.7 million barrels per day (bpd) until the end of 2023, in response to the collapse in oil demand caused by the coronavirus pandemic.

However, as the global economy recovers and oil prices rebound, some members have been reluctant to comply with their quotas, while others have argued for a revision of the baseline from which the cuts are calculated.

The dispute led to the postponement of the OPEC+ meeting, which was originally scheduled for Monday, to Thursday. The meeting will be held online instead of in person in Vienna, as previously planned.

Despite the delay and the disagreement, most observers expect the group to extend the current level of cuts until at least the end of the first quarter of 2024, to prevent a new glut of oil in the market.

Some analysts also predict that the group could announce additional cuts, either by all members or by the two leaders, Saudi Arabia and Russia, who have been making voluntary extra reductions of 1 million bpd each since July.

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