Oil Bears Got OPEC+ Decisions Wrong
Reuters: OPEC+ Extends Deep Oil Production Cuts into 2025
Reuters: OPEC+ Bets the Robust Crude Oil Demand Forecast is Right
Bloomberg: OPEC+ Oil Deal’s Real Winner Once Again is the UAE
Summary
OPEC+ has agreed to extend major oil output cuts into 2025 to stabilize the market amid slow demand growth, high interest rates, and increased US production. The group will maintain a reduction of 3.66 mb/d and continue a voluntary cut of 2.2 mb/d until the end of September 2024. The deal boosts the UAE's production limit, acknowledging its increased capacity and solidifying its strong negotiation position within OPEC+. Further discussions have been deferred until November 2025, but OPEC+ has also indicated flexibility to adjust these plans.
Figure (1) above shows OPEC+ cuts as planned to the end of 2025. The unwinding of 2.2 mb/d voluntary cuts as planned is also shown (in Gray). However, because of the compensations for earlier increases in production by Russia Iraq, and Kazakhstan, the numbers may not be accurate, especially on the declining part. However, please look at the chart as showing the general idea of the cuts than exact numbers.
