Oil prices remained steady on Thursday afternoon after OPEC+ postponed its planned production boost by three months, pushing the new timeline to April 2025. The group also extended the full return of production cuts by one year, now set for the end of 2026. As of 14:06 ET, Brent crude for February delivery edged up 0.06% to $72.35 per barrel, while West Texas Intermediate (WTI) remained unchanged at $68.54.
This decision came shortly after analysts at Standard Chartered predicted that OPEC+ would likely delay any reductions in voluntary cuts until the end of the first quarter of 2025, possibly extending that further. The prediction was based on the weak market sentiment that has largely shaped oil prices this year.
According to Standard Chartered, much of the bearish outlook in the oil market stems from concerns about the scale of voluntary cuts implemented by eight OPEC+ countries. Traders are worried that the balance between oil demand growth and increased supply from non-OPEC+ nations might not be enough to offset the planned rise in OPEC+ output, which could lead to an oversupply. However, analysts pointed out that this view ignores OPEC+ reassurances that any increase in output would be based on market conditions, not an automatic decision.
The focus among traders has been on how many barrels could be added to the market before oversupply becomes a risk. But according to Standard Chartered, current positioning and market dynamics suggest that there is no immediate risk of surplus production.
In an announcement on November 3, OPEC confirmed it would delay output increases by a month, now aiming for the start of 2025. Standard Chartered added that the postponement does not necessarily mean OPEC believes the market cannot absorb additional oil, but rather reflects its understanding that overly pessimistic forecasts for the oil market in 2025 have been fueling concerns. The latest decision from OPEC+ strengthens the idea that any increase in production will depend on market conditions, rather than being automatically triggered as some traders fear.
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