OPEC+ to Extend Oil Cuts into 2025 Amid Demand Concerns

OPEC+ is expected to extend its voluntary oil production cuts into the third and possibly fourth quarters of 2024, and some cuts into 2025, according to sources. The organization has made significant output cuts since 2022 to counter rising production from non-members and concerns over weak demand, especially from China.

OPEC+ will likely prolong voluntary oil cuts into the third and possibly fourth quarters of 2024 and extend some cuts into 2025, two OPEC+ sources said ahead of the group's meeting on Sunday.

The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, has made a series of deep output cuts since late 2022 amid rising production from non-members such as the United States, and worries over demand amid high interest rates. Oil prices trade near $80 per barrel, below what many OPEC+ members need to balance their budget. Worries over slow demand growth in top oil importer China have weighed on prices and oil market analysts expect OPEC+ to extend cuts to balance supply.

OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand. The cuts include 3.66 million bpd by OPEC+ members valid through to the end of 2024, and 2.2 million bpd of voluntary cuts by some members which expire at the end of June.

The deal on Sunday could include extending some or all of the cuts of 3.66 million bpd into 2025 and some or all of the voluntary cuts of 2.2 million bpd into the third or fourth quarter of 2024, the two sources said.