① According to media reports citing sources, OPEC+ will consider further production cuts next year at Thursday's meeting to support crude oil prices; ② OPEC+ has reached a preliminary agreement on further production cuts of more than 1 million b/d.
Financial News Agency, November 30. According to media reports citing sources, OPEC+ will consider further production cuts next year at Thursday's meeting to support crude oil prices.
After the news broke, international crude oil once rose by more than 1%. As of press release, the increase had narrowed to 0.75%.
OPEC+ is an alliance formed by the Organization of Petroleum Exporting Countries (OPEC) and countries led by Russia. The Union's crude oil production accounts for more than 40% of the world's total crude oil production, about 43 million b/d.
Two sources said OPEC+ has reached a preliminary agreement on further production cuts of more than 1 million b/d.
Since Saudi Arabia and Russia's combined voluntary production reduction plans of 1.3 million b/d will expire at the end of this year, the conference focused on plans for 2024. Currently, OPEC+ has cut production by a total of about 5 million b/d.
Two representatives participating in the discussion said that a new round of production reduction plans may reduce market supply by 1 million b/d to 2 million b/d in the first quarter of next year.
Helima Croft, a capital market analyst at Royal Bank of Canada, said that Saudi Arabia has voluntarily cut production by an additional 1 million b/d since July, but does not want to bear the additional production cuts alone.
Croft added: “We can imagine a situation where Russia and Saudi Arabia delay production cuts until the first quarter of 2024 and form a group willing to cut production further.”
Brent crude oil, which is the benchmark for global oil prices, has fallen from nearly 98 US dollars/barrel at the end of September to about 83.50 US dollars/barrel due to market concerns about a slowdown in global economic growth and an oversupply of crude oil.
Previously, the OPEC meeting originally scheduled to be held from November 25 to 26 was postponed until November 30. Sources said that African member states are dissatisfied with their 2024 production quotas, which caused the meeting to be postponed, but this issue has basically been resolved.
According to the schedule, the OPEC online ministerial meeting will be held at 19:00 Beijing time, followed by a broader OPEC+ meeting at 22:00.