Saudi Arabia and Russia, members of OPEC+, agreed to maintain the voluntary cut in oil production this November 30. However, the measure could not contain the price drop by 2.8 %, to settle at $82.59 per barrel.

The decline in the value of the barrel “occurred a day after several members of the OPEC+ alliance (OPEC and allies), including Saudi Arabia and Russia, announced, at the end of a teleconference, new voluntary cuts in their supplies for the first quarter of 2024.”

The outlook for the oil market casts uncertainty because not all partners participate in the agreed reductions and those “announced by Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman” are not mandatory, but voluntary.

One day after the OPEC+ meeting, on Friday, December 1, Brent Crude and Texas intermediate oil (WTI), which are the benchmarks in Europe and the United States, suffered falls of 4.7 % and 2.5 % respectively. For this Monday, December 4, the downward trend continued, around 78.4 and 73.5 dollars/barrel.

M.Pino

Source: bancaynegocios

(Reference image source: Patrick Hendry, Unsplash)

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The recently announced decision by OPEC + to reduce daily production by 2 million barrels will be applied from November. The decision was published in a declaration at the end of the 33rd Ministerial Meeting of Members and non-OPEC Members.

One of the main reasons that has led the organization to take this measure is the fear of a recession. OPEC + seeks to give a strong boost to oil prices that are affected by the global energy situation.

The reduction to be applied, of 2 million barrels per day, is equivalent to 2 % of world demand, currently affected by uncertainty not only in the energy field but also in the economy.

In statements by Saudi Arabian Energy Minister Abdulaziz bin Salman at the end of the meeting, the official declared: “(In OPEC+) we will continue to be a moderating force, to generate stability.”

It was learned that OPEC members and non-members have agreed to a new meeting to be held on December 4, in addition to the extension of their cooperation agreement until the end of 2023.

M.Pino

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With information from news agencies and international media

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Oil price continues to climb to maximum levels since the beginning of January 2020, after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC +.

In this way, the price of a barrel of Brent oil, the benchmark for Europe, rose 2 % compared to the close of Thursday and reached 68.13 dollars, the highest price since January 8, 2020, before the Covid-19 pandemic. Meanwhile, the West Texas Intermediate (WTI) barrel, the reference for the United States, rose 1.9 % and exceeded the level of 65 dollars for the first time since the beginning of January 2020.

The OPEC + countries agreed this week to extend their production cuts until April, with the exception of Russia and Kazakhstan, which have been allowed to increase their pumping level, the organization reported.

In January, the cartel agreed that the cut for February would be 7.125 million per day, while for March it would be 7.05 million per day. Likewise, Saudi Arabia will maintain, for the time being, its voluntary and additional reduction of one million barrels per day.

The oil ministers of the OPEC member countries have also decided to extend until July 2021 the maximum period for countries to compensate for the excess production they have incurred in recent months.

The next meeting of OPEC and its allies will take place on April 1st, as planned, to decide whether to raise, maintain or cut crude production again.

K. Tovar

Source: dpa

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