OPEC+ Agree to Extend Supply Cuts through Q2

OPEC+ alliance agreed to extend the current supply cuts until mid-year to avoid supply surpluses.

Three OPEC+ sources told Reuters that the alliance would consider extending voluntary oil production cuts in the second quarter of 2024 to provide additional support to the market, and two of them reported that they might keep the cuts until the end of the year.

OPEC+, led by Russia, agreed in November to voluntary cuts amounting to a total of about 2.2 million barrels per day during the first quarter of this year, which included Saudi Arabia extending its voluntary reduction in production.

Under the current agreement, the total production cuts are scheduled to reach 3.66 million barrels per day as of the beginning of April.

OPEC+ has implemented a series of production cuts since late 2022 to support the market amid rising production from the United States and other non-member producers and concerns about demand while major economies face a crisis of high interest rates and seek to curb inflation.

OPEC expects relatively strong demand growth of 2.25 million barrels per day, led by Asia, for another year, while the International Energy Agency expects much slower growth of 1.22 million.