OPEC+ has announced a delay in its meeting on oil production plans, rescheduling it from December 1 to December 5 due to a scheduling conflict. The meeting will now be held via video conference, as several ministers will be attending the 45th Gulf Summit in Kuwait City on December 1, the organization said in a brief statement on Thursday.
At the rescheduled meeting, OPEC+ members are expected to discuss future plans for oil production cuts in 2024. Earlier this year, OPEC+ signaled plans to gradually increase production by the end of 2023, contingent on favorable prices. However, with oil prices failing to improve for several months, the group has postponed its plans to return supply to the market. Some analysts believe these production limits may need to be extended indefinitely, given the market’s continued inability to respond with higher prices.
There is growing speculation that OPEC+ may once again delay its planned output increase in January, citing ongoing market weakness. Azerbaijan’s energy minister recently indicated that OPEC+ is likely to maintain production cuts into December, adding further weight to these speculations.
According to Goldman Sachs, the current production cuts and better adherence to quotas by some members are providing support for Brent Crude prices in the short term. The investment bank expects that the cuts will be extended until at least April 2025, with any easing of output curbs likely to begin gradually after the first quarter of next year.
“Saudi Arabia is more likely to extend oil production cuts due to the recent price drop,” Goldman Sachs analysts wrote in a recent note. “We now expect these cuts to last until April 2025, instead of ending in January.”
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