OPEC+ production cuts in place and what could change

OPEC+ analysts and sources have indicated that the group, consisting of OPEC members such as Saudi Arabia and allied countries like Russia, will hold an online meeting on Thursday. During this meeting, further adjustments to the existing agreement, which has already curtailed oil supplies until 2024, might be considered to support the oil market.

The initially scheduled meeting on November 26 was postponed due to a dispute over production levels among African oil-producing countries. However, sources have later suggested that the group is close to reaching a settlement on this matter.

Here’s a summary of the existing agreement and potential developments:

• Existing Agreement (As of June 2023):

• OPEC+ extended oil production cuts by 3.66 million barrels per day until the end of 2024.
• Saudi Arabia voluntarily reduced production by one million barrels per day until December 2023.
• Russia’s reduction in oil exports by 300,000 barrels per day will continue until the end of 2023.
• The group aims to produce 40.58 million barrels per day in 2024, with adjusted targets for some countries.
• The UAE has permission to increase production in 2024.

• Key Points for Thursday’s Meeting:

• There might be an option for an “additional collective cut,” according to an OPEC+ source.
• OPEC+ is reportedly studying additional cuts.
• The group may revise 2024 targets for Nigeria, Angola, and Congo.
• Saudi Arabia may consider extending its voluntary production cut of 1 million barrels per day.

• Potential Outcomes:

• An additional collective cut may be proposed.
• Saudi Arabia could extend its voluntary production cut.
• Adjustments to 2024 targets for specific countries may be made.

Traders and analysts will closely monitor the meeting’s outcomes and statements for potential impacts on oil prices. The geopolitical and economic context will also play a significant role in determining the market’s response.