U.S. crude oil production broke another record in September, putting additional pressure on the OPEC+ group, which looks to keep oil prices above $80 per barrel by controlling “market stability.”
Source: Reuters
The underwhelming OPEC+ meeting last week showed that there is dissent within the group about deeper cuts and production quotas. The Saudis rolled over their extra voluntary cut of 1 million barrels per day (bpd) and Russia – the leader of the non-OPEC allies in OPEC+ – pledged to deepen its supply cut to 500,000 bpd from 300,000 bpd.
Some other OPEC+ producers announced additional voluntary cuts, which brings the total OPEC+ supply cut to 2.2 million bpd for the first quarter of 2024. That’s in addition to Russia’s 500,000 bpd cut via export reductions of 300,000 bpd of crude and 200,000 bpd of refined petroleum products, OPEC said.
The OPEC+ supply decision, which the market found unconvincing, will likely erase the expected deficit early next year but leaves the question ‘what’s next’ unanswered, analysts say.