LONDON/MOSCOW/ DUBAI: OPEC+ on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026 due to weak demand and booming production outside the group.
OPEC+, which pumps about half the world’s oil, had been planning to start unwinding cuts from October 2024 but a slowdown in global demand and rising output elsewhere forced it to postpone the plans on several occasions. OPEC+ groups the Organization of the Petroleum Exporting Countries and allies such as Russia.
Despite the group’s supply cuts, global oil benchmark Brent crude has mostly stayed in a $70 to $80 per barrel range this year and on Thursday traded near $72 a barrel, having hit a 2024 low below $69 in September.
“They have been talking about this (output hike) since June but they are still delaying,” said Bjarne Schieldrop, chief commodities analyst at SEB. “This means there is no upside to the oil price in the next couple of years.”
Schieldrop said the oil market will now shift focus to the actions of US President-elect Donald Trump, who could impose new sanctions on Iran, tariffs on China and has pledged an end to the Russia-Ukraine war.
OPEC+ members are holding back 5.86 million barrels per day of output, or about 5.7% of global demand, in a series of steps agreed since 2022 to support the market.
The steps include cuts of 2 million bpd by the whole group, 1.65 million bpd of first stage of voluntary cuts by eight members and another 2.2 million of second stage of voluntary cuts by the same eight members.
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