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Oil fell despite the extension of OPEC+ production cuts

Oil fell despite the extension of OPEC+ production cuts

Its production will be reduced by a total of 5.86 million barrels per day (bpd), which is equivalent to 5.7% of global demand.

Photo: Freepik

The prices of Petroleum fell this Monday, while investors assimilated the complex agreement reached by the group of producers OPEC+ to extend various levels of production cuts, many of them until 2025.

He Brent of the North Sea, the benchmark in Europe, lost 3.39%, below $80 to $78.36, while US crude oil futures West Texas Intermediate (WTI) for delivery in July they fell 3.59% to $74.22.

The Organization of Petroleum Exporting Countries and its allies led by Russiaknown as OPEC+, are reducing their production by a total of 5.86 million barrels per day (bpd), which is equivalent to 5.7% of global demand.

The group agreed on Sunday to extend cuts of 3.66 million bpd that were due to expire at the end of 2024 until the end of 2025.

to sustain the market in the face of lower than expected demand growth, higher interest rates for longer in the main economies of Westconcern about slow growth in demand in Chinamain importer of Petroleumand the increase in production of non-EU countries OPEC.

It also extends 2.2 million bpd of voluntary cuts that were due to expire at the end of this month, but will now remain in place until the end of September, before being phased out in September 2025.

Some analysts described the decision as progressively bearish for oil prices. Petroleumas it had always been anticipated that the additional 2.2 million bpd of cuts would be phased out.

These eight main members represent only 30% of the world’s production of Petroleummaking it more difficult for the group to convince markets that it is able to support prices when the proportion of production over which it has effective control is limited, said Callum Macpherson, head of commodities at Investec.

Source: Ambito

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