New Delhi [India], Crude oil prices fell 541 points to 6149 on Tuesday from the previous day's low of 6690, even as OPEC+ cut its oil output in an aim to stabilize the market. Decided to do. Major expansion announced.
The decision, which extends the cuts of 1.65 million barrels per day (bpd) announced in April 2023, will now remain in effect until the end of 2025.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, revealed they will continue to implement substantial oil production cuts totaling 5.86 million bpd.
The move is designed to address challenges posed by sluggish demand growth, high interest rates and rising oil production by the United States.OPEC+ had initially planned for mandatory cuts of 3.66 million bpd to expire at the end of 2024. However, under the new agreement, these cuts will be extended until the end of 2025.
Additionally, voluntary reductions of 2.2 million bpd by eight member states were originally scheduled to expire in June 2024, but will now be extended to September 2024. Following this extension, the voluntary deduction will be phased out from October 2024 to September 2025.
Despite these measures, which are intended to tighten supply and boost oil prices, the market reaction was unexpectedly negative.Analysts suggest that several factors could be responsible for the fall in crude oil prices. These include ongoing concerns over the global economic outlook, higher interest rates and strong growth in US oil production, which could reduce the impact of OPEC+'s supply management efforts.
OPEC+ is looking for a more stable economic environment with low interest rates and consistent global growth to ensure the effectiveness of its strategy. The group's projections indicate that OPEC+ crude oil demand will average 43.65 million bpd at the end of 2024.
Under this scenario, if production remains at April's rate of 41.02 million bpd, stocks are projected to decline by 2.63 million bpd.However, this decline is expected to slow as voluntary reductions begin to be phased out in late 2024.
The decision, which extends the cuts of 1.65 million barrels per day (bpd) announced in April 2023, will now remain in effect until the end of 2025.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, revealed they will continue to implement substantial oil production cuts totaling 5.86 million bpd.
The move is designed to address challenges posed by sluggish demand growth, high interest rates and rising oil production by the United States.OPEC+ had initially planned for mandatory cuts of 3.66 million bpd to expire at the end of 2024. However, under the new agreement, these cuts will be extended until the end of 2025.
Additionally, voluntary reductions of 2.2 million bpd by eight member states were originally scheduled to expire in June 2024, but will now be extended to September 2024. Following this extension, the voluntary deduction will be phased out from October 2024 to September 2025.
Despite these measures, which are intended to tighten supply and boost oil prices, the market reaction was unexpectedly negative.Analysts suggest that several factors could be responsible for the fall in crude oil prices. These include ongoing concerns over the global economic outlook, higher interest rates and strong growth in US oil production, which could reduce the impact of OPEC+'s supply management efforts.
OPEC+ is looking for a more stable economic environment with low interest rates and consistent global growth to ensure the effectiveness of its strategy. The group's projections indicate that OPEC+ crude oil demand will average 43.65 million bpd at the end of 2024.
Under this scenario, if production remains at April's rate of 41.02 million bpd, stocks are projected to decline by 2.63 million bpd.However, this decline is expected to slow as voluntary reductions begin to be phased out in late 2024.
