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5mo ago

OPEC+ Poised to Extend Oil Production Cuts as Market Faces Surplus Concerns

Upcoming OPEC+ meeting expected to delay planned output increase into 2025, with global demand outlook and geopolitical tensions influencing oil prices.

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Active pump jacks increase pressure to draw oil toward the surface at the South Belridge Oil Field on February 26, 2022, in unincorporated Kern County, California, approximately 141 miles (227 km) northwest of Los Angeles, California. - From rural areas of the eastern states where modern oil production began to cities in southern California where pumpjacks loom not far from homes, lax regulations and the petroleum industrys boom and busts cycles have left the US pockmarked with perhaps hundreds of thousands of oil wells that are unsealed and haven't produced in decades. In a first, Washington is making a concerted effort to plug these wells by allocating $4.7 billion in federal infrastructure dollars to plug the wells in an effort to lessen the negative health and environmental impact of the disused wells. (Photo by Robyn BECK / AFP) (Photo by ROBYN BECK/AFP via Getty Images)

Overview

  • OPEC+ is anticipated to extend its current oil production cuts until at least the first quarter of 2025, according to multiple sources within the group.
  • Oil prices have fluctuated slightly this week, reflecting uncertainty ahead of the December 5 OPEC+ meeting and concerns over a potential market surplus in 2025.
  • China's manufacturing activity showed its fastest expansion in five months, offering some optimism for oil demand, though analysts predict China's crude imports may peak as early as next year.
  • Geopolitical tensions in the Middle East, including breaches of a ceasefire between Israel and Lebanon, have added volatility to the oil market.
  • Saudi Arabia is expected to lower crude prices for Asian buyers to a four-year low, while concerns about U.S. Federal Reserve interest rate decisions have further capped price gains.