OPEC+ Extends Oil Output Cuts To 2024. Prices Down

The oil-producing countries in Opec+ plan to extend their output cuts next year. This is because prices have been weak and there may be too much oil. They came to an agreement about this.

The oil cartel met in Vienna on Sunday. Member countries agreed to reduce output by 1.4m barrels a day. Saudi Arabia, Iraq, and Russia are big producers.

Sources from Opec+ informed Reuters that the group is likely to maintain current policies for 2023 and decrease output further in 2024. This will happen only if new production baselines are agreed upon by all members.

Saudi Arabia will reduce its output voluntarily by 500,000 barrels a day. It's unclear when the cuts will start.

Opec+ is made up of the Organisation of the Petroleum Exporting Countries and Russia-led allies. They produce 40% of the world's crude. Their choices on oil policy can hugely affect its prices.

The group agreed on a deal. The start of formal talks was delayed by over six hours. Members discussed production baselines.

Bloomberg reported that there was a delay. The delay was because powerful group members and African countries had a dispute. They disagreed about how to measure cuts. Ministers had side meetings to talk about the details.

Saudi Arabia led a group who tried persuading Nigeria and Angola to set more realistic output targets.

Reports have stated that the United Arab Emirates wanted a higher baseline as their production capacity has increased.

In April, Opec+ said they would cut production by 1m barrels a day. This made oil prices go up. The cut is equal to 3.7% of global demand. Opec+ was already planning to cut production by 2m barrels a day until 2023.

Russia will keep cutting its oil production by 500,000 barrels per day. This will continue until the end of 2021. The decision has been made at the same time as other oil-producing countries. They are also cutting production to keep the price stable.

Oil prices rose by $9 a barrel to over $87 after the announcement in April. However, they quickly went back down due to worries about the world economy and demand. Recently, Brent crude settled at $76 a barrel.

The upcoming Opec meeting is on 26 November in Vienna.