OPEC+ nearing deal on new output cuts of more than 1 million b/d: delegates

OPEC and its allies are closing in on an agreement for additional production cuts of between 1 million b/d and 2 million b/d, delegates said Nov. 30, as the group seeks to shore up wavering oil prices as the market heads towards its traditional low demand season.

The provisional agreement has to be confirmed by OPEC+ ministers and additional cuts are expected to be in conjunction with current 1.3 million b/d cuts from Saudi Arabia and Russia which are reassessed monthly.

After slashing quotas by 5 million b/d over much of the past year, the OPEC+ alliance has deemed further reductions necessary, though the exact distribution and duration have yet to be finalized, delegates said.

The group has struggled to reach agreement on quotas for 2024, leading it to postpone its ministerial meeting by four days. Sticking points to a deal included resistance from African producers to cut targets for 2024, and the UAE holding out on keeping its hard-won production increase for 2024 agreed in June.

In recent weeks, prices hit four-month lows, but have since recovered slightly. Platts, part of S&P Global Commodity Insights, assessed Dated Brent at $82.28/b on Nov. 29.

OPEC remains optimistic on demand for its crude in 2024. Other analysts, including S&P Global Commodity Insights, see much lower demand for OPEC crude going forward, as non-OPEC supply growth continues to outpace expectations and Chinese economic data remains weak.