VIENNA, Austria: As major oil-producing nations, collectively known as OPEC+, convene today (Thursday) to address the continuous slump in oil prices, uncertainty looms over the decisions they will make.
OPEC+ consists of 13 OPEC members supporting Middle Eastern side and 10 partners siding towards Russia. Analysts anticipate discussions around the extension or deepening of production cuts into the next year to stabilize prices in the face of global economic challenges.
The scheduled videoconference for OPEC states is set for 11:00 am (1000 GMT), with their 10 partners joining at 3:00 pm to determine the output policy for the coming year. Disagreements over output quotas persist within the OPEC+ group, leading to a four-day delay in the crucial meeting.
Nine OPEC+ members, including Moscow, Baghdad, and Dubai, have already reduced their output in recent months. The current challenge revolves around convincing African countries to accept reduced production quotas, a move that is met with resistance from some members pushing for higher production.
Negotiations remain intense, and sources indicate that an agreement has not been reached yet. The outcome depends on the response of the alliance’s African members. Angola and Nigeria are among the countries expressing reluctance to lower their quotas in 2024, indicating a complex negotiation process.
Analysts from Commerzbank suggest that maintaining the current quotas is more likely than a joint agreement to curb production further.
OPEC+ has implemented supply cuts of approximately five million barrels per day since the end of 2022. Concerns about falling demand due to slowing economies, particularly in China, the world’s largest crude importer, persist among producers. Despite the challenges, oil prices, currently around $80 per barrel, remain above the average of the last five years.
Investors warn that cutting production may not be sufficient to prevent further price declines. While oil prices have not reached the levels seen after the Russian invasion of Ukraine, ongoing economic uncertainties continue to impact the global oil market.
