MOSCOW/LONDON- An OPEC+ panel is unlikely this week to make any changes to its current deal to cut production and to start unwinding some cuts from October, despite recent sharp declines in oil prices, five sources from the producer group told Reuters.
“I think it is unlikely that we will see a new change or development in Thursday’s meeting, especially to limit more OPEC+ production,” one of the sources said, declining to be identified.
Oil has fallen about 9 percent so far this month, trading below $80 a barrel on Tuesday, waning on dissipating geopolitical risks and concern about the strength of Chinese demand.
The Saudi government’s communications office did not immediately return a request for comment. OPEC’s headquarters in Vienna did not immediately respond to a request for comment.
OPEC+ is currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7 percent of global demand, in a series of steps agreed since late 2022.
At its last meeting in June, the group agreed to extend cuts of 3.66 million bpd by a year until the end of 2025 and to prolong the most recent layer of cuts – a 2.2 million bpd cut by eight members – by three months until the end of September 2024.
OPEC+ plans to gradually phase out the cuts of 2.2 million bpd over the course of a year from October 2024 to September 2025.
The JMMC, which groups the oil ministers from Saudi Arabia, Russia and other leading producers, usually meets every two months and can make recommendations to change policy.
The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, have made a series of deep output cuts since late 2022.
OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand.
Those include 3.66 million bpd of cuts, which were due to expire at the end of 2024, and voluntary cuts by eight members of 2.2 million bpd, expiring at the end of June 2024.
OPEC expects demand for OPEC+ crude to average 43.65 million bpd in the second half of 2024, implying a stocks drawdown of 2.63 million bpd if the group maintains output at April’s rate of 41.02 million bpd.
The drawdown will be less when OPEC+ starts phasing out the 2.2 million bpd voluntary cuts in October.
