8 OPEC Plus producers announce voluntary cuts (Reuters)

Oil prices fell in early trading on Friday, extending losses they started after producers in the OPEC Plus alliance agreed to voluntary crude production cuts in the first quarter of next year, cuts that came below market expectations.

February Brent crude futures fell 0.4% to $80.5 a barrel by 7:34 GMT, and U.S. West Texas Intermediate crude futures fell 0.3% to $75.7.

Saudi Arabia, Russia and other members of the OPEC Plus group, which pumps more than 40 percent of global oil, agreed to voluntary production cuts of more than 2024 million barrels per day in the first quarter of <>.

However, at least 1.3 million bpd of these cuts come from the extension of voluntary cuts already in place by Saudi Arabia and Russia.

Delegates said earlier that new additional cuts of up to two million barrels per day were being discussed.

OPEC Plus' output, which consists of the Organization of the Petroleum Exporting Countries and allies including Russia, of about 43 million bpd already reflects cuts of about 5 million bpd, aimed at supporting prices and stabilizing the market.

Sale Details

OPEC said in a statement after the meeting that the total cuts amounted to 2.2 million bpd from 8 producers.

That figure includes the extension of Saudi and Russian voluntary cuts of 1.3 million barrels per day.

The additional 900,200 bpd cuts pledged on Thursday are divided by 6,<> bpd of fuel exports from Russia and the rest by six members, according to Reuters.

The UAE said it had agreed to cut output by 163,220 bpd, while Iraq announced it would cut an additional <>,<> bpd in the first quarter.

Algeria said it plans to voluntarily reduce its oil production by 51,2024 barrels per day for the first quarter of 135, while Kuwait announced that it will voluntarily reduce oil production by 3,<> barrels per day for <> months starting from the first of next January.

Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Kazakhstan and Algeria were among the producers who said the cuts would be phased out after the first quarter if market conditions permitted.

Concerns

OPEC Plus' focus on cutting production comes amid a drop in prices that had already reached $98 in late September, as well as growing concerns about weak economic growth in 2024 and expectations of oversupply.

The IEA this month forecast a slowdown in demand growth in 2024 as "the final phase of the post-COVID-19 economic recovery dissipates, consolidating gains from energy efficiency and expanding electric vehicle fleets and structural factors."

Oil prices fell about 0.3% in early trading on Friday (Reuters)

Brazil Membership

OPEC Plus has invited Brazil to become a member of the group, and Brazil's energy minister has said he hopes to join in January.

Brazil is among the world's top 10 oil producers and Latin America's largest producer since 2016.

Brazil's crude oil production reached a record high of 3.7 million barrels per day in September, an increase of almost 17% from the same month last year and an increase of 6.1% from August 2023, according to the agency "Argos Media".

"Since Brazil is a major oil producer and leading the growth of crude production, it is important to involve it, but it seems that they are not cutting production like Mexico, so it will end up being good for OPEC Plus, less important for the oil market," UBS analyst Giovanni Stonovo said, according to AFP.

The OPEC Plus alliance emerged in late 2016 when Russia and nine other countries joined OPEC to support falling oil prices, and since late 2022, the alliance has relied on production cuts of about 5 million barrels per day.

Source: French + Reuters + Websites