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03/06/24
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Crude Inches Down as Investors Evaluate Extended OPEC+ Supply Cuts
On Monday crude prices inched down as investors evaluated the complex deal brokered by producer group OPEC+ to extend several output cuts, many of them into next year.
Brent crude futures for delivery in August were 42 cents lower at $80.69 per barrel while U.S. West Texas Intermediate (WTI) crude futures for delivery in July dropped 45 cents to $76.54 per barrel.
Some analysts said the group’s decision was incrementally bearish for crude prices.
OPEC+ is currently reducing output by 5.86M barrels per day. This equates to around 5.7% of demand globally.
The group agreed to extend most of its cuts into next year to support the market as demand growth is softer than expected, high interest rates in Western economies is protracted, and there are ongoing concerns over slow demand growth in China and increasing non-OPEC production.
The deal includes extending 3.66M bpd of cuts that would expire this year until the end of next year.
It also extends 2.2M bpd of voluntary cuts that were set to expire at the end of June but will now only expire at the end of Sept. before they are phased out gradually by Sept. next year.
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