OPEC+ Maintains Output Reduction To Boost Oil Prices

A special OPEC+ panel recommended Wednesday that the oil cartel keep its current output reduction strategy unchanged after heavyweights Saudi Arabia and Russia vowed to maintain their cuts to keep prices elevated.

The OPEC+ panel has no decision-making power but discusses market conditions and makes recommendations, which are then formally discussed and decided at the organisation's ministerial meetings.

Oil prices recovered in recent months and approached $100 per barrel last week as top producers Saudi Arabia and Russia have throttled supply by taking millions of barrels off the market.

However, crude prices have eased in more recent days, as markets fret over a slowing global economy and interest rates remaining high for longer than expected in the United States and Europe.

OPEC+ said it would maintain its production reduction strategy valid until the end of 2024, adding that it would remain flexible enough to make changes depending on market conditions.

The panel praised the efforts of Saudi Arabia to voluntarily reduce its production by one million barrels per day (bpd) since July. Russia will maintain its export cuts of about 300,000 bpd until December, according to government reports.

Both Riyadh and Moscow stressed that they would review their cuts next month to decide whether to deepen them or increase production. Analysts are watching the situation closely. If the two countries reduce supply further, it will force oil prices higher, causing a negative ripple effect across the global economy, which is primed for a reduction in cost-of-living inputs like energy.