OPEC+ said Sunday that it will extend the majority of its deep oil output cuts into 2025 in an effort to stimulate oil prices amid low demand. The group will maintain its cut of 3.66 million barrels per day through the end of 2025 and extend the cuts of 2.2 million barrels per day through the end of September 2024.
Trading prices for brent crude oil have been around $80 per barrel recently, lower than needed for OPEC+ members to manage their budget. Currently, the group members are cutting output by 5.86 million barrels per day, equaling around 5.7% of global demand.
“We are waiting for interest rates to come down and a better trajectory when it comes to economic growth … not pockets of growth here and there,” said Saudi Energy Minister Prince Abdulaziz bin Salman.
The International Energy Agency predicts that demand for OPEC+ oil plus stocks will average around a much lower level of 41.9 barrels per day in 2024. “The deal should allay market fears of OPEC+ adding back barrels at a time when demand concerns are still rife,” said Amrita Sen, co-founder of Energy Aspects think tank.
