
The OPEC+ group, which comprises OPEC members combined with some other big oil-producing countries, has decided to delay unwinding some of its production cuts over concerns about weakening demand.
Oil prices had dropped before the decision due to Chinese demand being weaker than expected and there being concerns about US and Chinese demand in the near-term. There are also expectations that oil production in Libya can be restored.
Increased production in the United States from companies like ExxonMobil and Chevron, the makers of the Mobil and Texaco lubricant ranges, also presents challenges for OPEC+ in terms of ensuring that the market is not oversupplied.
The decision was made at a virtual meeting. At the meeting, the eight OPEC+ countries that have implemented voluntary production cuts on top of the compulsory group cuts agreed to delay a plan to gradually wind down these cuts. The process will now begin on December 1, 2024. A spokesperson for OPEC said in a press release:
“In recognition of this strengthened resolve and renewed firm commitment, the eight participating countries have agreed to extend their additional voluntary production cuts of 2.2 million barrels per day for two months until the end of November 2024, after which these cuts will be gradually phased out on a monthly basis.”
The press release also gave a schedule for the planned production increases but said it would also reserve the flexibility to reverse or pause them. It also pointed out that Kazakhstan and Iraq had reiterated their ambitions to compensate for their overproduction so far this year.