2023-12-01 12:53:27
OPEC+ announces 2.2 million barrel per day cut, oil prices expected to rise
The member states of the OPEC+ oil cartel have announced a significant cut of 2.2 million barrels per day in the first quarter of 2024. This news has caused industry analysts to predict that oil prices will rise in the first few months of next year, according to a recent CNBC report.
The countries that have committed to these cuts include Saudi Arabia, which has announced an extension of a 1 million barrel per day cut that began in July and will continue until the end of the first quarter of 2024. In addition, Russia plans to reduce inventories by 300,000 barrels per day over the same period. Other countries participating in the cuts include Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman.
Industry experts believe that if these countries meet their obligations, the prices of oil will indeed begin to rise. UBS strategist Giovanni Stanovo predicts that after the end of the cut period, the barrels that were previously cut will gradually return to the market, which will help keep the oil market in deficit in the first half of 2024, leading to price increases.
Furthermore, Goldman Sachs has published a forecast for higher prices, based on the assessment that the OPEC countries will indeed meet their commitments to cuts. The forecast is for an increase of $4 per barrel, with the expectation that OPEC will be able to maintain Brent oil prices in the range of $80-$100 per barrel during 2024.
Overall, it is likely that consumers can expect to see higher oil prices in the coming months as these production cuts take effect.
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