OPEC+ Extends Production Cuts to Support Oil Prices
Date of Agreement: June 2, 2024
Production Cuts: OPEC+ has extended most current oil production cuts to support prices hovering around $80 per barrel.
Phased Reduction: The cuts will be phased out gradually over the next year and a half.
Deep Cuts Extension: Deeper cuts of 3.66 million barrels per day (bpd) will remain until the end of 2025.
Easing Cuts: Cuts of 2.2 million bpd will be eased over a year starting in October 2024.
Reasons for Cuts:
Demand Growth: Slower demand growth, particularly from China.
Global Interest Rates: Rising interest rates worldwide.
US Production: Increased oil production from the United States.
Price Outlook:
Experts predict that oil prices will trade in the range of $70-$90 per barrel in 2024, with OPEC+ acting to prevent prices from dropping too low.
About OPEC:
The Organization of the Petroleum Exporting Countries (OPEC) is a coalition of major oil-producing nations that collaborate to influence global oil markets. Their strategies aim to set production levels and pricing to maximize profits.
Contextual Events:
Global Disruptions: Russia's invasion of Ukraine has significantly disrupted the global oil market, influencing OPEC's strategies.
Supply Concerns: Discussions about increasing oil production to address supply concerns.
Ongoing Influence: OPEC's role and influence in the global oil market remains complex and evolving.