OPEC may extend low oil production due to weak demand
21 November 2024 09:10
The member countries of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, including Russia, known as OPEC, may maintain the current policy of deep cuts in oil production for a longer period. The reason for this is weak market demand, which remains below expectations due to economic uncertainty and a slowdown in global growth. This was reported by Reuters with reference to sources close to the organization, "Komersant Ukrainian" reports
The production cuts introduced by OPEC earlier this year were a response to falling oil prices and rising supply in the market. The parties to the agreement took such measures to stabilize the market and maintain the price level, which is critical for the economies of many member countries. However, expectations of a recovery in demand have not yet been met, forcing the organization to consider continuing the current policy.
Sources say that despite some positive signals, such as partial economic growth in some regions, the overall situation on the global oil market remains difficult. Oil-producing countries face the risk of oversupply, which could further drive down prices. Under these circumstances, OPEC is seeking to avoid hasty steps and may refrain from increasing production even in the event of a slight improvement in demand.
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Experts point out that the current policy of significant production cuts is aimed at ensuring price stability and minimizing losses for oil-producing countries. At the same time, some parties to the agreement express concern about the long-term impact of such measures on their markets. However, the general position remains unchanged: the priority is to control the level of supply to avoid chaos in the market.
It is worth noting that economic indicators, including energy demand, are highly dependent on macroeconomic factors, such as the geopolitical situation, financial markets, and inflation. In this environment, OPEC is acting cautiously, trying to balance its own interests with global economic realities.
Analysts predict that the policy of production cuts is likely to remain in place until the market stabilizes. However, the duration and scale of these measures will depend on how quickly demand recovers and how oil prices will change in the near future.
As wrote earlier, experts predict a record drop in oil prices.
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