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Saturday March 02, 2024

Oil prices fall

By AFP
December 01, 2023

NEW YORK: Oil prices fell on Thursday after rising by more than 1 percent earlier in the session after OPEC+ oil producers agreed to voluntary output cuts approaching 2 million barrels per day (bpd) for early next year, with each country announcing separately its voluntary cut.

Brent crude futures for January fell by 28 cents, or 0.3 percent, to $82.82 a barrel by 1730 GMT. The front-month Brent contract, down about 6% on the month, expires later on Thursday.

In this file photo taken on April 23, 2020 Pump jacks operate near Loco Hills in Eddy County, New Mexico. — AFP
In this file photo taken on April 23, 2020 Pump jacks operate near Loco Hills in Eddy County, New Mexico. — AFP

The more liquid February contract was down $2.05, or 2.5 percent, at $83.83. U.S. West Texas Intermediate crude futures fell by $2.00, or 2.5 percent, to $75.86, and is down about 9 percent on the month.

Brent's premium to U.S. WTI futures hit its highest since January in the session. Saudi Arabia, Russia and other members of OPEC+, who pump more than 40 percent of the world's oil, held a virtual meeting on Thursday to discuss 2024 output amid concerns the market faces a potential surplus.

OPEC+ said the latest agreement would involve cuts approaching 2 million bpd, including Saudi Arabia extending a voluntary cut of 1 million bpd it has had in place since July. Their output of some 43 million bpd already reflects cuts of about 5 million bpd aimed at supporting prices and stabilising the market.

The additional OPEC+ cuts for the first quarter of 2024 are set to be voluntary, a delegate said. Each country will announce separately its voluntary cut, according to a source familiar with the matter.

Russia agreed to output cuts in the first quarter of 2024 of 500,000 bpd, according to Russia's deputy prime minister. Algeria will cut output by 51,000 bpd, Kazakhstan will cut by 82,000 bpd, Oman will cut by 42,000 bpd and Kuwait will cut by 135,000 bpd, according to various country officials. OPEC+ oil-producing countries meeting on Thursday to discuss 2024 output levels will convene again next June on 2024 output levels.

The OPEC+ Joint Ministerial Monitoring Committee (JMMC) ended its meeting on Thursday without making a recommendation regarding 2024 output levels, three delegates told Reuters.