OPEC+ members reportedly agreed on 1 million bpd of oil cuts for the beginning of 2024 during their annual meeting.
This information was obtained by Reuters from inside sources on Thursday, the day of OPEC+ key meetings, during which output quotas for the next year were to be agreed upon.
The decision was pushed by Saudi Arabia, which has long wanted to implement higher oil production cuts.
The country is also going to enforce comparatively smaller curbs and further oil cuts.
Oil jumped this morning after hitting a six-month low on Tuesday. WTI is up by 1.37% and Brent is up 1.40% at the time of writing on Thursday.
“There is speculation that, in addition, cuts of up to one million barrels a day could be on the cards to help put a floor under crude prices,” said Susannah Streeter from Hargreaves Lansdown on Tuesday morning, before the meeting.
“Although there are hopes that the final statement will include a reduction in fossil fuel consumption, UN Secretary-General Antonio Guterres is calling for a phaseout and a time frame to be included. Finding agreement on this is likely to be fraught, but there are hopes of an early win to agree on a new fund to pay for climate-caused damage,” she added.
Last week, there was much speculation about the reason why this pivotal meeting was rescheduled.
Some publications, including Reuters, obtained source information about African countries, Nigeria and Angola, being unable to come to an agreement with the rest of OPEC+.
Angola and Nigeria, top African oil producers, want to set higher oil quotas for next year.
It has now been confirmed by a number of sources that that is indeed the case.
The evaluation of the African countries’ baselines for 2024 and production quotas was scheduled for examination by three independent data providers.
Hamas and Israel are still amidst a hostage negotiation-related truce, which was recently extended by one day. The promise of peace in Gaza sent oil prices lower, but a number of analysts speculate that this might also be the calm before the storm for Gaza and oil prices.
OPEC+ and investors still worry about the potential spread of the conflict into other parts of the Middle East.