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The view shows the logo of the organization of oil countries (OPEC) during the UN COP29 climate conference, in Baku, Azerbaijan on November 13, 2024.
Maxim Shemetov | Reuters
OPEC+ countries on Wednesday agreed to leave their official quotas for production unchanged, and the market focus moved to increase the potential compared to the oxygen subsidies of the Alliance, which conducted some voluntary cuts in production.
The OPEC+ Coalition operates on the generally accepted production agreement, as well as two cuts in production, which are informally solved only by an octopus. As part of the formal policy, the entire OPEC+ group reduces approximately 2 million barrels a day by the end of 2026.
On Wednesday, OPEC+ nation said they agreed “to confirm the level of total oil production for OPEC and non-OPEC countries”, as agreed during the December meeting of the Alliance.
Separately from the official policy, OPEC+ in the river weight, Russia and Saudi Arabia, as well as Algeria, Iraq, Kazakhstan, Kuwait, Oman and the United Arab Emirates, are also being produced by 1.66 million barrels a day before the end of the next year.
By the end of March, these eight members also introduced the second joint 2.2 million barrel for the day of voluntary production, which they began to gradually rest in a few months. As of the latest reports, these countries should return the combined about 1 million barrels a day of their previously reduced volumes in April-June and will evaluate further production steps over the weekend last weekend.
One OPEC+delegate, which could only be anonymously commented on the negotiating sensitivity, said CNBC that another increase in the production in July was probably the second delegate, noting that the potential hike agreed over the weekend may be as sharp as another 411,000 barrels per day.
The terms of these campaigns coincided with the increasing concern of the OPEC+Group that some members who had in the past contained Kazakhstan, Iraq and Russia, did not respect their production quotas.
“This group does everything possible, but this is not enough in this group, we need the help of others,” said UAE Energy Minister Sukhail Mohammed Al-Mazrui at the World Congress Board, which is moderated by Dan Murphy CNBC.
On Wednesday, OPEC+ nation called on the OPEC Secretariat to evaluate the sustainable production capacity of each country to determine their base lines for 2027.
Opec+ members will hold a ministerial meeting next November 30.
Oil prices were on the positive territory immediately after the OPEC+meeting. The ICE Brent contract with a shelf life amounted to $ 65.06 a barrel at $ 16:30 in London, which is 1.5% compared to the close price on Tuesday. Free Free-Month Leup Nymex WTI traded $ 61.96 per barrel, which is 1.76% compared to the previous day.
Summer spikes
Oil requirements usually arise in the summer with the start of the travel season and additional burning to produce electricity for the needs of air conditioning in several countries of the Middle East.
In the recording earlier this week, in the first quarter of this year, the UBS Giovanni Staunovo strategist labeled the “closely balanced oil market” compared to the large predicted surplus supplies.
“We are waiting for further revision of demand and supply with more incoming data,” Staunov said. “With demand in seasonal growth and eight OPEC+ member countries with additional voluntary cuts, most likely, more barrels to the market in July, we are looking for oil prices to move towards $ 60-70/BBL in the coming months.”
Al-Mazrui UAE repeated these sentiments, stating: “We must remember the demand. Demand is selected. And demand will surprise us if we are not invested enough.”
