Oil prices fell on Thursday after rising more than 1 per cent earlier in the session after Opec+ oil producers agreed to voluntary output cuts approaching 2 million barrels per day (bpd) for early next year, with each country announcing separately its voluntary cut.
Brent crude futures for January fell 50 cents, or 0.6 per cent, to $82.60 a barrel by 11:30 am. EDT (1630GMT). The front-month Brent contract, down about 6 per cent on the month, expires later on Thursday.
The more liquid February contract was down $2.54, or 3.1 per cent, at $80.34.
US West Texas Intermediate crude futures fell $2.63, or 3.4 per cent, to $75.24, and is down about 9 per cent on the month.
Brent’s premium to US WTI futures hit its highest since January in the session.
Saudi Arabia, Russia and other members of Opec+, who pump more than 40 per cent of the world’s oil, held a virtual meeting on Thursday to discuss 2024 output amid concerns the market faces a potential surplus.
Opec+ said the latest agreement would involve cuts approaching 2 million bpd, including Saudi Arabia, extending a voluntary cut of 1 million bpd it has had in place since July.
Their output of some 43 million bpd already reflects cuts of about 5 million bpd aimed at supporting prices and stabilising the market.
The additional Opec+ cuts for the first quarter of 2024 are set to be voluntary, a delegate said. Each country will announce separately its voluntary cut, according to a source familiar with the matter.
But there is a large degree of scepticism on how individual Opec members will reach those cuts, according to Bob Yawger, director of energy futures at Mizuho.
“This is a very sketchy report - there is a huge question of their credibility in how these cuts will happen,” Yawger said, adding that the UAE is supposed to be increasing production by 200,000 bpd by 2024.
Nigeria has been given a 2024 output quota of 1.5 million barrels per day (bpd), Angola 1.11 million bpd and Congo 0.277 million bpd, a draft statement from Opec+ seen by Reuters showed.
Russia will cut 500,000 bpd and others will also contribute cuts, one source said.
Algeria’s energy minister told Reuters his country had agreed to curb its output by 50,000 bpd.
Opec+ oil-producing countries will convene again next June.
