OPEC+ has recently agreed to extend its voluntary oil output cuts until the end of the year as weak demand notably from China and rising supply outside the group maintain downward pressure on the oil market. OPEC+ had delayed the increase in output from October because of falling prices, weak demand, and rising supplies. Fears about the conflict in the Middle East disrupting the region’s oil output eased, further weighing on crude prices.
Output cuts remain
Eight members of the Organization of the Petroleum Exporting Countries and allies were due to raise output in December as part of a plan to gradually reverse the group’s most recent output cuts.
However, the OPEC secretariat noted in its latest statement that the eight OPEC+ countries Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, which previously announced additional voluntary oil output adjustments in April and November 2023, have agreed to extend the November 2023 voluntary production adjustments of 2.2 million barrels per day for one month until the end of December 2024.
The eight OPEC+ countries also reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary oil production adjustments that they agreed on during the group’s 53rd meeting. This includes full compensation by September 2025 for the overproduced volumes since January 2024.
Cuts of 5.86 million barrels per day
The eight OPEC+ countries also noted that Iraq, Russia and Kazakhstan strongly reaffirmed their commitment to the agreement, including the additional voluntary oil production adjustments and their compensation schedules for the overproduced volumes since January 2024.
The group is currently cutting 5.86 million barrels per day of output, equal to about 5.7 percent of global demand. OPEC+ agreed to those cuts in separate steps since 2022 to support the market.
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