OPEC is likely to extend its production cuts for another month, according to Azerbaijan’s energy minister, Parviz Shahbazov, who spoke to Reuters ahead of the group’s meeting on Sunday.
Shahbazov stated that while it is uncertain whether OPEC+ will discuss continuing the output cuts at the meeting, it is difficult to predict the decision.
OPEC has faced pressure to maintain its production cuts due to low oil prices. Any move to reduce the cuts is seen as potentially negative for prices. Even rumors of a possible rollback have caused significant price drops, despite the lack of any official decision from OPEC.
Originally, the group planned to increase output by 180,000 barrels per day in December. However, this decision was tied to the price environment. If prices remained low, as they have, the increase was delayed.
Speculation has arisen that some OPEC and OPEC+ members are dissatisfied with the current policy, which seems to extend the cuts longer than initially expected. Countries that rely heavily on oil revenue have pushed for a rollback to boost sales volumes in response to low prices.
Meanwhile, BP’s CEO highlighted that oil demand has been stronger than expected, which could signal a more optimistic future for oil producers once market traders recognize the demand shift. However, some analysts continue to describe demand as weak. A recent Reuters report suggested that OPEC+ is likely to extend its cuts into the first quarter of 2025.
One source from within OPEC+ indicated that while the decision to delay output increases may not be popular, there would be no strong opposition to extending the cuts through early next year.
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