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OPEC and its allies delayed increasing supplies for a third time, opting to start with a modest increase in April, and then unwind the cuts over 18 months, a slower pace than previously planned.
Oil steady after OPEC+’s decision to push back the revival of shuttered production by another three months failed to lift sentiment in a market that’s expected to suffer from a glut next year.
Brent crude traded near USD72 a barrel after closing 0.3% lower recently, with West Texas Intermediate above USD 68. OPEC and its allies delayed increasing supplies for a third time, opting to start with a modest increase in April, and then unwind the cuts over 18 months, a slower pace than previously planned.
Crude has been confined to a tight range since mid-October, with bullishness from geopolitical developments in the Middle East and Ukraine countered by expectations for a glut in 2025 due to higher output from the Americas and lacklustre Chinese demand. Weak global market balances mean there is little scope for the cartel to restore the output it’s been withholding since 2022.
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The delayed start to the relaxation of curbs, the longer timeframe for the unwind, as well as an agreement from the United Arab Emirates to push back an increase in its base target would reduce by 61% the amount of oil that would be added by OPEC+ next year, according to Standard Chartered Plc
