OPEC+ Weighs Sustained Oil Production Cuts Amid Market Challenges

OPEC+ is considering an extension of its oil production cuts for at least three more months starting in January. The group faces challenges due to global demand slowdown and rising external output. As it prepares to gather, the possibility of deeper cuts seems unlikely, with previous reductions in place to stabilize prices.

OPEC+ is contemplating extending its current oil production cuts for at least an additional three months beginning in January, sources told Reuters. The move aims to bolster market stability amid global demand headwinds and heightened external production.

The oil-producing alliance, which includes OPEC nations alongside allies such as Russia, had intended to ease production limits through 2025. However, unpredictable demand and increased production outside the group present challenges to this plan, applying pressure to oil prices. Insiders suggest that a significant increase in cuts is not under consideration, opting instead to maintain the existing reductions into the year's first half.

Even with supply limitations, the global oil benchmark Brent crude has hovered between $70 and $80 per barrel throughout the year, dipping to a low below $69 in September. OPEC+ members are withholding 5.86 million barrels per day, representing roughly 5.7% of global demand, as part of ongoing efforts to support the market. Discussions also include resolving a phased 300,000 bpd output increase for the UAE set for early 2025, which remains a negotiation point.

(With inputs from agencies.)