The OPEC+ alliance has delayed plans to ease production cuts amid a lukewarm outlook for global demand. The group, which restricts combined oil output to 39.725 million barrels per day until December 2026, now expects to extend its voluntary production decline into the first quarter.
Eight OPEC+ members will maintain their 2.2 million-barrel-per-day production reduction and begin increasing output incrementally between April and September 2026. Several other countries will also delay unwinding a second 1.7-million-barrel-per-day cut until the end of 2026.
Global oil prices have remained stable, despite ongoing conflict in the Middle East and a weak demand outlook. The current production cuts are part of OPEC+’s formal output strategy, which aims to balance supply and demand.
Analysts at Capital Economics warn that even though today’s decision buys time for OPEC+, weak global demand fundamentals could lead to higher prices. The risk is skewed to the downside, according to their note.
Source: https://www.cnbc.com/2024/12/05/opec-members-to-delay-oil-production-increase-until-april.html