OPEC+ may cut oil output further at meeting this week

Oil-producing countries are unhappy with the 20% drop in prices since late September, and may consider further tightening of supply.

Reuters , citing sources close to the matter, said they expected the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to extend or even reduce supply this week to support oil prices. At the close of trading on November 27, Brent crude oil prices were close to $80 a barrel, down from nearly $98 at the end of September.

OPEC+ will meet on November 30. The meeting was originally scheduled for November 26. However, the event was postponed because African members did not agree with the proposed production level.

However, Reuters sources said that in the past few days, these countries have gradually made concessions. On X, Kuwait's Oil Ministry pledged to comply with OPEC's decisions, especially those related to production quotas.

After a series of cuts from the end of 2022, Saudi Arabia, Russia and other members of OPEC+ have pledged to withdraw 5.16 million barrels of oil per day, equivalent to 5% of global oil demand. This figure includes 3.66 million barrels from OPEC+ countries and voluntary reductions by Saudi Arabia and Russia.

Reuters quoted an OPEC+ source as saying that the current cuts may not be enough. "OPEC+ is not happy to see increasing market volatility ahead of the next meeting, although the fundamentals remain strong. Ministers are likely to discuss what additional policies are needed to stabilize the trend," the source said.

Many OPEC+ members now rely on oil as a major source of government revenue. However, crude oil prices have been falling steadily recently.

Goldman Sachs this week predicted that both Saudi Arabia and Russia would continue to voluntarily cut production until at least the end of the first quarter of 2024. Analysts at ING agreed, saying that otherwise “the pressure on the market will be even greater.”

In mid-month, the International Energy Agency (IEA) cut its oil demand forecast for next year. They also warned that the market could be oversupplied in the first quarter of 2024.

Ha Thu (according to Reuters)

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