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Bloomberg Analyst Survey Predicts OPEC+ Output Extension

When Bloomberg surveyed analysts last week about their expectations for further OPEC+ production cuts ahead of the originally planned November 26 meeting, only one analyst was expecting an extension of existing cuts. By Friday, with the OPEC+ meeting delayed four days, Bloomberg says around half says they see new measures in store to tighten markets. 

When OPEC+ gathers on November 30, around 50% of analysts surveyed by Bloomberg predicted that the expanded cartel would extend existing ~1-million-barrel-per-day cuts into 2024. Six analysts predicted that there would be additional curbs on top of this for all cartel members, and a further two analysts forecast that, once again, it would just be Saudi Arabia and Russia. 

The survey comes as OPEC+ wrangles internally over output cuts, with African nations Angola, Nigeria and Congo not keen to see their targets reduced despite their diminishing capacity. 

Earlier on Friday, Reuters reported that OPEC+ had made progress in talks with its African producers for 2024 quotes. Back in June, Angola, Nigeria and Congo were forced to accept lower output quotes for next year, and the upcoming meeting was expected to make them commit to additional cuts, with Saudi Arabia expressing discontent over the fact that it shoulders the bulk of the market-tightening burden. 

Analysts surveyed by both Reuters and Bloomberg seem confident that an agreement will be reached among OPEC+ members when they meet on November 30. One source told Reuters he was 99% confident a deal would be reached, while two others noted that a compromise was close. Analysts surveyed by both suggested that the recent plunge in oil prices to $80 and weak oil demand expected, as usual, in the first-quarter of the New Year, set the stage for more potential output cuts, not merely an extension. 

According to Bloomberg, OPEC+ delegates have primarily sent signals that we would be just be looking at an extension of existing supply cuts into 2024; however, RBC Capital Markets, JP Morgan & Chase and Pierre Andurand are not ruling out the possibility of additional curbs by the cartel. 

Commerzbank AG analyst Carsten Fritsch told Bloomberg that if the Saudis simply extended voluntary cuts, “the price would likely fall somewhat in the short term”. 

Brent crude oil was trading at $82.04 on Friday at 11:41 ET, up 0.51%, while WTI was trading at $76.93, down 0.22%. 

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By Tom Kool for Oilprice.com

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