INSUBCONTINENT EXCLUSIVE:
On December 5, oil futures experienced a decline amid a volatile trading session
This movement followed a significant meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.The
market reacted with disappointment after eight member countries agreed to extend their production cuts of 2.2 million barrels per day (bpd)
until March 2025, a decision that was initially set to conclude in December.At the New York Mercantile Exchange (Nymex), January WTI crude
oil settled down by 0.35%, or $0.24, closing at $68.30 per barrel.Meanwhile, February Brent crude oil on the Intercontinental Exchange (ICE)
fell by 0.30%, or $0.22, finishing at $72.09 per barrel
OPEC+ plans to gradually reverse these production cuts starting in April, with a complete rollback anticipated by September 2026.This
This was noted by Mukesh Sahdev from Rystad Energy.Oil Market Tensions: Anticipation Builds Ahead of OPEC+ Summit
(Photo Internet reproduction)Sahdev remarked that the overall signal for the market remains constructive, likely preventing significant
price drops in the short term.OPEC+ Oil Production CutsHowever, analysts at Capital Economics caution that despite this extension providing
OPEC+ with additional time, the prevailing weak global oil demand could lead the group back to a similar predicament within three months.The
delay in production cuts is expected to tighten the global oil market by approximately 0.5% of demand, which may help sustain prices
marginally.Capital Economics further indicated that they now foresee a balanced market for oil in 2025
This contrasts with their earlier prediction of a slight surplus.This situation illustrates the delicate balance OPEC+ must maintain between
managing production levels and responding to fluctuating global demand dynamics
The implications of these decisions resonate throughout the energy sector and influence economic stability worldwide.
