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Market Analysis

OPEC+ Expected to Maintain Current Output Policy at Upcoming Meeting, Sources Indicate
Amos Simanungkalit · 5.3K Views

12

Image Credit: Reuters

Key OPEC+ ministers will convene on Thursday to determine their output policy, with insiders indicating that the group is unlikely to alter its current agreement to reduce production. They also expect to begin easing some of these cuts starting in October, despite the recent significant decline in oil prices.

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+ and led by Russia, will hold an online Joint Ministerial Monitoring Committee (JMMC) meeting at 1000 GMT on Thursday.

According to five OPEC+ sources cited by Reuters this week, no changes to the current plan are anticipated.

Oil prices have decreased from a 2024 peak of over $92 per barrel in April to approximately $81 on Wednesday, driven by concerns about demand strength. However, tensions in the Middle East have provided some support for prices this week.

OPEC+ is currently reducing output by a total of 5.86 million barrels per day (bpd), representing about 5.7% of global demand, as part of a series of measures agreed upon since late 2022.

In their last meeting in June, the group decided to extend the 3.66 million bpd cuts by another year, lasting until the end of 2025. They also agreed to prolong the latest set of cuts—2.2 million bpd by eight members—by three months until the end of September 2024.

The current strategy includes a plan for OPEC+ to gradually phase out the 2.2 million bpd cuts over a year, from October 2024 to September 2025.

The JMMC, comprising oil ministers from Saudi Arabia, Russia, and other major producers, typically meets every two months and can make recommendations to the broader OPEC+ group.

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.

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