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Opec+ agrees to 2024 production target of 40.46 million bpd amid demand concerns

04 June 2023 21:21 (UTC +04:00)

The Opec+ alliance of 23 oil-producing countries has agreed to a new production target of 40.46 million barrels per day for 2024, as economic growth concerns weigh on the outlook for crude demand, APA reports citing Reuters.

In a statement on Sunday, the group said that Russia will extend its voluntary output cut of 500,000 bpd until the end of next year.

The decision was taken "in light of the continued commitment ... to achieve and sustain a stable oil market, and to provide long-term guidance for the market, and in line with the successful approach of being precautious, proactive, and pre-emptive", Opec+ said.

The group will hold its next meeting on November 26 in Vienna.

The announcement comes as Brent, the benchmark for two thirds of the world’s oil, lost about 11 per cent of its value this year on weak economic growth in the US and China – the two top oil-consuming nations.

Brent settled 2.49 per cent higher at $76.13 a barrel on Friday after the US Senate passed a debt ceiling agreement, averting what would have been a first-ever default.

West Texas Intermediate, the gauge that tracks US crude, was up 2.34 per cent at $71.74 a barrel.

The international benchmark crossed $85 a barrel in April after some Opec+ producers surprised markets by announcing combined voluntary output cuts of 1.16 million barrels per day from May until the end of the year.

The move took the group’s total production curbs to 3.66 million bpd, or 3.7 per cent of global demand.

At an event in Qatar, Saudi Arabia's Energy Minister told oil market short sellers to “watch out” amid volatility in the market.

“I keep advising them that they will be 'ouching'. They did 'ouch' in April,” Prince Abdulaziz bin Salman said.

Short sellers strategically position themselves to make a profit if prices decline, by selling borrowed assets in the hope of repurchasing them at a lower price.

The Saudi minister’s comments helped to lift prices before a sudden turnaround after Russia’s Deputy Prime Minister, Alexander Novak said Opec+ was likely to stick to existing production targets at their meeting.