Ahead of OPEC+ meeting

02.06.24

Ahead of OPEC+ meeting
Market expects production cuts will be prolonged at today meeting as members are still worried about the oil prices which have been demonstrating a correction in the last two month and now stay below 80 US dollars for barrel (WTI) which is a level members consider as appropriate for balancing their budgets.

These worries amount as other oil producers (outside OPEC) hold on increasing production. Also some stall in inflation slowdown in recent months make central banks consider taking their time with too quick policy easing. The prospect for rates staying high longer plays against oil as consumers reduce their spending when credit is expensive.

The intrigue for today’s meeting is for how long these cuts will be prolonged and whether there is any chance for adding to current cuts. Now cuts total 5.86 mil bpd consisting of 3.66 mil bpd cuts up to the end of 2024 and 2.2 mil bpd voluntary cuts up to the end of June.