OPEC+ Extends Oil Production Cuts Amid Price Slump

OPEC+ has announced an extension of its oil production cuts, continuing to reduce output by 2.2 million barrels per day through November. This move comes as crude prices remain under pressure despite previous attempts to stabilize the market. Starting in December, the coalition of top oil producers plans to gradually phase out these cuts, aiming to eliminate them by November 2025.

This decision follows earlier extensions by OPEC+. In June, the group extended the same production cut through September, and in April 2023, they announced a separate reduction of 1.65 million barrels per day, which will remain in place until the end of 2025.

Despite these ongoing efforts, oil prices have struggled. West Texas Intermediate, settled at $69.15 per barrel, while Brent crude futures, the international benchmark, closed at $72.69 per barrel. Prices have fallen this year, weighed down by concerns over sluggish demand from China, the world’s largest oil importer, and record-high oil production in the United States. On Wednesday, U.S. oil prices dipped below $70 per barrel for the first time since December 2023.

OPEC+ has restrained oil output for over two years to prevent a supply surplus that could lower prices, threatening its member states' oil-dependent economies. However, according to the International Energy Agency (IEA), a potential oversupply of up to 8 million barrels per day could weaken OPEC+’s influence over the market. The IEA has revised its forecasts for global oil demand, predicting growth of 970,000 barrels per day in 2024, slightly down from its earlier estimate of 1.1 million barrels per day.