OPEC+ Slashed its Q1 2024 Oil Supply by an Extra 2.2 Million Barrels/Day

  • USOil
    (${instrument.percentChange}%)

OPEC+ Oil Supply Cuts

Several OPEC+ counties on Thursday, agreed to slash supply by a total of 2.2 million barrels per day for the first quarter of 2024. Standing out is Saudi Arabia, which will rollover its 1 million bpd cuts and Russia that will curb supply by 500,000 bpd [1]. These measures go on top of the previously agreed output reduction program of 3.66 million bdp, scheduled to last until the end of the next year. These brings the total tally for Q1 2024 to nearly 5.9 million bpd. [2]

According to the November Oil Report, the International Energy Agency (IEA) projects world oil demand of almost 103 million bpd in 2024, and the total OPEC+ curbs would account for more than 5% of that. However, the agency expects demand growth to slow compared to the current year and had warned that the oil market "could shift into surplus at the start of 2024". [3]

The deep cuts of the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, have failed to support oil prices recently. After October's 2023 peak, USOil posted two straight losing months, shedding more than 15%. It also dropped on Thursday, after the new cuts announcement.

The new curbs for Q1 2024 are voluntary by specific countries and not formal OPEC+ plan, amidst disagreements around the quotas. These led to the postponement of the meetings, which were originally scheduled to take place over the last weekend. Markets appear unconvinced for now, as OPEC+ supply has shown an increase in recent months. The output reduction program is rather deep, but compliance is key, while non-OPEC producers pump more and IEA expects them to continue to lead global growth next year.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 01 Dec 2023 https://www.opec.org/opec_web/en/press_room/7267.htm

2

Retrieved 01 Dec 2023 https://www.opec.org/opec_web/en/press_room/7160.htm

3

Retrieved 04 Mar 2024 https://www.iea.org/reports/oil-market-report-november-2023

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.