World oil prices fall despite OPEC+ production cuts

World oil prices fell early on June 3, despite moves by the Organization of the Petroleum Exporting Countries Plus (OPEC+, comprising OPEC and Russia) to extend deep production cuts until 2025.

According to Reuters, Brent crude futures for August delivery fell 24 cents to $80.87 per barrel, or 0.3%. US West Texas Middle (WTI) crude futures for July delivery fell 19 cents to $76.80, or 0.25%.

Currently, OPEC+ is cutting production by a total of 5.86 million barrels per day, equivalent to about 5.7% of global demand, including a 3.66 million barrel per day cut (which will expire at the end of 2024) and voluntary cuts by 8 members of 2.2 million barrels per day (which will expire at the end of June 2024).

But on June 2nd, the group agreed to extend the 3.66 million barrels per day production cut for another year, until the end of 2025. At the same time, they will extend the 2.2 million barrels per day cut for another three months, until the end of September 2024. The countries implementing the second round of voluntary cuts are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia, the United Arab Emirates (UAE), and Gabon.

The decision comes as oil prices are trading near $80 a barrel, far below the level many OPEC+ members need to balance their budgets. Analysts say the prolonged conflict in many places, coupled with China's economic growth still falling short of expectations, are the two main reasons for OPEC+'s production cuts.

HUY QUOC

Source: https://www.sggp.org.vn/gia-dau-the-gioi-giam-bat-chap-opec-cat-giam-san-luong-post742714.html