Oil prices rise as Opec+ sticks to output cut policy

Member countries will continue to closely assess market conditions and 'take additional measures at any time'

Opec+ member countries have been co-ordinating output cuts to stabilise oil markets. AP Photo
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Oil prices rose on Thursday as Opec+ members kept their oil production policy unchanged at an online meeting during continuing market uncertainty.

Brent, the benchmark for two thirds of the world’s oil, was trading 0.78 per cent higher at $81.18 a barrel at 4.14pm UAE time.

West Texas Intermediate, the gauge that tracks US crude, was up 0.8 per cent at $76.46 a barrel.

The Opec+ joint ministerial monitoring committee (JMMC) said the meeting assessed the current situation in the global markets to decide about the future production policy.

"The JMMC reviewed the crude oil production data for the months of November and December 2023 and noted the high conformity for participating Opec and non-Opec countries," Opec said in a statement.

In their previous meeting, in November, Opec+ members including Russia and Saudi Arabia extended their voluntary oil output reductions until the end of the first quarter of 2024 over concerns about fuel demand.

Saudi Arabia, the world's largest oil exporter, will keep its voluntary output cut of a million barrels per day until the end of March, while Russia is expected to deepen its cut to 500,000 bpd and extend it until the end of the first quarter of 2024.

Countries including the UAE, Kuwait, Algeria and Oman also announced voluntary outputs to support oil markets.

Opec+ now has total production cuts in place of 3.66 million barrels per day, which includes a two million bpd reduction agreed in 2022, as well as voluntary cuts of 1.66 million bpd announced in April.

"The committee will continue to closely assess market conditions," Opec said. The committee also noted the willingness of member countries "to address market developments and their readiness to take additional measures at any time".

The committee is scheduled to meet again on April 3.

Last week, oil posted its biggest weekly gain since October as supply concerns rose because of tensions in the Middle East and Houthi attacks in the Red Sea, while prospects of higher demand were boosted by positive economic growth in the US.

However, demand concerns continue to affect market traders.

Last month, Opec forecast a decline in crude oil demand growth in 2025 but said fuel consumption would be driven by solid economic activity in China.

Global oil demand is expected to grow by 1.8 million barrels per day next year, down from Opec's estimate for this year of 2.2 million bpd, the group said in its monthly oil market report.

Updated: February 01, 2024, 1:16 PM