By Alex Lawler, Olesya Astakhova and Maha El Dahan
Summary
- OPEC+ announces no new group cut target for 2024
- Instead members led by Saudi Arabia to make voluntary cuts
- Saudi to roll over 1 million bpd cut into Q1
- Russia to cut 500,000 bpd
- OPEC+ invites Brazil to join
LONDON/MOSCOW/DUBAI, Nov 30 (Reuters) – OPEC+ oil producers on Thursday agreed to voluntary output cuts approaching 2 million barrels per day (bpd) for early next year led by Saudi Arabia rolling over its current voluntary cut, delegates told Reuters.
Saudi Arabia, Russia and other members of OPEC+, who pump more than 40% of the world’s oil, failed to agree a group cut at a virtual meeting on Thursday but members did go along with voluntary cuts.
Oil prices fell after rising by more than 1% earlier in the session after OPEC+ producers agreed to the cuts. Benchmark Brent crude for February futures were down 1.6% to $81.52 a barrel at 1747 GMT. The front-month January contract is due to expire on Thursday.
OPEC+ also invited Brazil, a Top 10 producer, to become a member of the group. The country’s energy minister said it hoped to join in January.
The group met to discuss 2024 output amid concerns the market faces a potential surplus and as a 1 million barrel per day (bpd) cut by Saudi Arabia was set to end next month.
OPEC+’s output of some 43 million bpd already reflects cuts of about 5 million bpd aimed at supporting prices and stabilising the market.
Saudi Arabia confirmed it will extend its voluntary cut for the first quarter of 2024. Russian Deputy Prime Minister Alexander Novak said Russia’s voluntary cut would be extended for the first quarter and reach 500,000 bpd including both crude and products.
Algeria’s energy minister told Reuters his country had agreed to cut output by 50,000 bpd while Kazakhstan said it would cut an extra 82,000 bpd in the first quarter.
Saudi Arabia, Russia, Kuwait, Kazakhstan and Algeria were among producers who said cuts will be unwound gradually after the first quarter market conditions permitting.
OPEC+ is focused on lower output with prices down from near $98 in late September and concerns brewing over weaker economic growth in 2024 and expectations of a supply surplus.
The International Energy Agency (IEA) this month forecast a slowdown in 2024 demand growth as “the last phase of the pandemic economic rebound dissipates and as advancing energy efficiency gains, expanding electric vehicle fleets and structural factors reassert themselves.”
The OPEC+ meeting coincides with the opening of the United Nations’ COP28 climate summit being hosted by OPEC member the United Arab Emirates.
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