Business & Economy

OPEC+ opts for ‘voluntary cuts’ in oil production, invites Brazil to join

Vienna, Nov 30 (EFE). – The Organization of Petroleum Exporting Countries and other allied states, known collectively as OPEC+, decided Thursday to adjust oil supply levels for 2024 with new “voluntary” cuts by some of its partners totaling about 2.2 million barrels per day in addition to the cuts announced in its April meeting.

This was the outcome of the virtual conference of energy and oil ministers from 23 countries on Thursday, which was originally scheduled for Sunday in Vienna, where OPEC is headquartered, but was postponed apparently due to internal disagreements.

The fact that the meeting ended without the usual press conference and only with a brief written statement that made no mention of binding production cuts seems to have disappointed the markets, where prices reversed the upward trend of recent days.

Thursday’s surprise news was the announcement that Brazil will join OPEC+ in January 2024. Brazilian Minister of Mines and Energy, Alexandre Silveira, spoke as a guest at the teleconference, which coincided with the opening of the COP28 climate summit in Dubai.

Brazil, currently the largest Latin American oil producer, will become the 24th partner of OPEC+ and the third in the region, along with Venezuela, a founding member of the organization since 1960, and Mexico, a part of OPEC+.

The ministers reaffirmed OPEC+’s “continued commitment” to “ensure a stable and balanced oil market,” according to the communiqué issued by the Vienna Secretariat of the organization.

In Thursday’s announcement, OPEC members stated Saudi Arabia will cut one million barrels per day, Iraq 223,000 b/d, the United Arab Emirates 163,000 b/d, Kuwait 135,000 b/d and Algeria 51,000 b/d. Non-OPEC members Kazakhstan and Oman will cut 82,000 and 42,000 b/d, respectively.

All cuts will begin on Jan. 1 and end late March 2024.

The cuts announced on Thursday are in addition to the 3.66 million barrels per day previously announced by the allies, which will last until the end of 2024.

The unusual form of Thursday’s agreement created skepticism in the markets, which had been expecting an additional binding cut of at least one million barrels per day.

While this expectation had pushed crude oil prices sharply upwards since Monday to levels not seen in the past three weeks, the downward trend returned after the unclear outcome of the meeting.

By 6:00 pm GMT, Brent, the European benchmark, had fallen to $82.9 a barrel, 0.2% lower than Wednesday’s close, while West Texas Intermediate (WTI), the US benchmark, was down 1.5% at $76.7 a barrel.EFE


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