July 25, 2024
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OPEC+ Likely to Maintain Current Oil Output Policy amid Market Stability

An OPEC+ ministerial panel is poised to refrain from suggesting any alterations to oil output policies during a meeting scheduled for Wednesday, as per insights from three sources within OPEC+.

This decision follows the coalition’s recent extension of voluntary oil output cuts until June.

Comprising the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, OPEC+ will convene an online Joint Ministerial Monitoring Committee (JMMC) to assess market conditions and members’ adherence to output agreements.

The robust rally in oil prices this year, fueled by supply constraints, disruptions to Russian energy infrastructure, and ongoing conflicts in the Middle East, has led to Brent crude trading above $89 a barrel on Wednesday.

According to Reuters, the meeting is anticipated to proceed smoothly, reflecting a consensus among participants. This sentiment aligns with views expressed by five other sources on Tuesday.

In a bid to bolster market stability, OPEC+ members, opted to prolong voluntary output cuts of 2.2 million barrels per day (bpd) until the conclusion of June.

Russian Deputy Prime Minister Alexander Novak articulated Russia’s commitment to reducing oil output rather than exports in the second quarter, aiming to equitably distribute production cuts among OPEC+ participants.

Upon the expiration of the voluntary curbs in June, total production cuts by OPEC+ are slated to decrease to 3.66 million bpd, in accordance with previous agreements initiated in 2022.

The JMMC, consisting of key OPEC+ stakeholders such as Saudi Arabia, Russia, and the United Arab Emirates, serves as a platform for assessing market dynamics and formulating recommendations for potential policy adjustments.

These recommendations are subsequently deliberated and ratified in full ministerial meetings involving all coalition members.

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