OPEC+ reached a deal on Thursday that would see the group’s oil production cuts spill over into the new year—and at a level that is a deeper cut than is currently in place, delegates said following today’s JMMC meeting.
The group agreed to cut production by an additional 1 million bpd starting in 2024, sources suggested—and this is in addition to the 1 million bpd Saudi Arabia has been cutting since the summer. This has been agreed to “in principle” and will be voted on at the full OPEC+ meeting.
For the specifics of what was agreed to among the OPEC+ members, Algeria agreed to cut January oil production by another 50,000 bpd, according to the country’s energy minister, cited by Reuters, while Saudi Arabia agreed to cut output by 1 million bpd. Russia will cut 500,000 bpd.
At the beginning of the Joint Ministerial Monitoring Committee (JMMC) meeting on Thursday, delegates told media that OPEC+ might discuss deeper oil production cuts for Q1 2024 and that total production cuts might be close to 2 million bpd, depending on the willingness of the countries to contribute. This figure was said to include a rollover of the 1.3 million bpd cuts from Saudi Arabia and Russia. However, the final decision on the plan for 2024 production would only come from a meeting of the full online OPEC+ meeting that is to follow.
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Oil prices had extended gains on the reports of deeper cuts next year and were trading 1.5% higher less than half an hour before the full OPEC+ meeting was set to begin.
The extra cuts from members other than Saudi Arabia give the OPEC’s heaviest hitter precisely what it wanted: the other members to chip in to help Saudi Arabia balance the market.
By Julianne Geiger for Oilprice.com