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Amid a flurry of unrest amid the OPEC+ oil group, a rollover of the prior agreement is the likely scenario, with deeper production cuts being less likely, four OPEC+ sources told Reuters on Tuesday.
The next meeting to discuss the plan for 2024 oil production among the group was previously pushed back to this coming Thursday as production levels for the group’s African producers proved to be a bone of contention. And now, it appears that a further delay is possible—although the group appears to be closer to a compromise over the levels that will be required next year for the group’s African members.
Angola and Nigeria have been balking at their quotas for next year.
Potential delays aside, additional production cuts—something that was said to be on the table before—is not actively being discussed, the sources said on Tuesday.
For now, OPEC+ has agreed to cut 5 million barrels per day, or about 5% of global demand according to Reuters—with the lion’s share being cut by heavyweight Saudi Arabia, who voluntarily cut another 1 million barrels per day of oil production on top of what it was already cutting. This voluntary cut is due to expire at the end of this year.
Despite the discord among the group, and indications that the group is likely to stick with the current agreement instead of cutting more, oil prices rallied on Tuesday, with WTI crude increasing 2.79% to $76.95, and Brent increasing by 2.66% to $82.11 per barrel.
The OPEC+ sources categorized the talks on oil policy as difficult with one of the sources saying that “everyone is sticking to their positions.”
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.