Are OPEC+ 2024 voluntary cuts enough to support oil prices?

  • OPEC+ has agreed to nearly 2 million bpd in voluntary production cuts amid concerns of a market surplus and the conclusion of Saudi Arabia’s 1 million bpd cut.
  • However, Brazil was also invited to join the group, possibly disrupting the planned cuts.

After the latest OPEC+ meeting, the price of WTI crude oil dropped more than 2% to $75 per barrel, ending a two-day win streak.   

During the meeting, OPEC+ agreed to cut oil production early next year by almost 2 million barrels per day (bpd). This decision was spurred by worries about having too much oil in the market coinciding with the end of Saudi Arabia’s voluntary 1 million bpd cut. 

Saudi Arabia said it would continue its cut until at least the first quarter of 2024. Russia also extended its cut to 500,000 bpd for the first quarter. Iraq agreed to reduce output by 211,000 bpd, and UAE pledged to cut 160,000 bpd in the first quarter. 

However, OPEC+ also invited Brazil to join the group. Brazil said they plan to join in January and increase their daily oil output to 3.8 million barrels, countering the other members pledges to cut production and support prices. 

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