OPEC+ extends oil output cuts through second quarter
OIL & GAS

OPEC+ extends oil output cuts through second quarter

It was reported that OPEC+ members, led by Saudi Arabia and Russia, had agreed to extend voluntary oil output cuts into the second quarter, providing additional support to the market amidst concerns about global economic growth.

The de facto leader of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia, stated that it planned to prolong its voluntary cut of 1 million barrels per day (bpd) until the end of June, maintaining its output at approximately 9 million bpd. According to the state news agency SPA, the reversals of these cuts would be gradual and contingent on market conditions.

Russia, heading the OPEC allies collectively referred to as OPEC+, announced that it would reduce oil production and exports by an additional 471,000 bpd in the second quarter. This decision was made in coordination with certain participating countries within OPEC+, as stated by Russian Deputy Prime Minister Alexander Novak.

In November, OPEC+ had initially agreed to voluntary cuts totalling about 2.2 million bpd for the first quarter, with Saudi Arabia extending its own voluntary cut. The individual announcements of these cuts were made by OPEC+ members, including Kuwait's commitment to reducing oil output by 135,000 bpd through June, Algeria's decision to curb output by 51,000 bpd, and Oman's plan to reduce output by 42,000 bpd.

Since late 2022, OPEC+ has been implementing a series of output cuts to bolster the market amidst increased production from the United States and other non-member producers. These efforts have also addressed concerns about demand as major economies contend with high interest rates.

Although rising geopolitical tensions due to attacks by the Iran-aligned Houthi group on Red Sea shipping have supported oil prices, worries about economic growth and high interest rates have exerted downward pressure. On Friday, Brent futures for May settled $ 1.64 higher, or 2%, at $ 83.55 a barrel.

Reuters reported last week that OPEC+ would contemplate extending oil output cuts into the second quarter, with one source stating that it was "likely."

It was reported that OPEC+ members, led by Saudi Arabia and Russia, had agreed to extend voluntary oil output cuts into the second quarter, providing additional support to the market amidst concerns about global economic growth. The de facto leader of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia, stated that it planned to prolong its voluntary cut of 1 million barrels per day (bpd) until the end of June, maintaining its output at approximately 9 million bpd. According to the state news agency SPA, the reversals of these cuts would be gradual and contingent on market conditions. Russia, heading the OPEC allies collectively referred to as OPEC+, announced that it would reduce oil production and exports by an additional 471,000 bpd in the second quarter. This decision was made in coordination with certain participating countries within OPEC+, as stated by Russian Deputy Prime Minister Alexander Novak. In November, OPEC+ had initially agreed to voluntary cuts totalling about 2.2 million bpd for the first quarter, with Saudi Arabia extending its own voluntary cut. The individual announcements of these cuts were made by OPEC+ members, including Kuwait's commitment to reducing oil output by 135,000 bpd through June, Algeria's decision to curb output by 51,000 bpd, and Oman's plan to reduce output by 42,000 bpd. Since late 2022, OPEC+ has been implementing a series of output cuts to bolster the market amidst increased production from the United States and other non-member producers. These efforts have also addressed concerns about demand as major economies contend with high interest rates. Although rising geopolitical tensions due to attacks by the Iran-aligned Houthi group on Red Sea shipping have supported oil prices, worries about economic growth and high interest rates have exerted downward pressure. On Friday, Brent futures for May settled $ 1.64 higher, or 2%, at $ 83.55 a barrel. Reuters reported last week that OPEC+ would contemplate extending oil output cuts into the second quarter, with one source stating that it was likely.

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