Oil prices rose slightly on Friday morning after Saudi Energy Minister Abdulaziz bin Salman said OPEC+ may temporarily pause or cancel voluntary production cuts if it believes the market is weak.
– We did our best, Salman said at the annual Russia Economic Forum in St. Petersburg on Thursday.
He also criticized Western analysts' description of the decision as pessimistic, saying that “their numbers are wrong” and that the analysts “did not listen to the media briefing” held after the meeting.
He also expressed confidence that oil prices will recover because the Western oil market “lacks memory” and “they will forget what was written in a day or two.”
OPEC+ is likely to continue to dominate the market, but “further cuts may be necessary as demand slows somewhat,” Jarand Rystad, CEO and founder of Rystad Energy, told Reuters.
– The ideal price level for OPEC+ lies within the price range we have seen – from the lows in the 80s to the highs in the 70s. He says that despite the fact that some Russian quantities have been cut off from the market due to sanctions and drone strikes, the impact is still under control.
The cut extends
At Sunday's meeting, OPEC+ agreed to extend current production cuts until 2025. This applies to both voluntary and mandatory cuts. The voluntary cuts will be extended until the third quarter of this year. They will then be phased out over the next 12 months.
The majority of overall reductions from both categories come from volunteers. The total cuts amount to 3.66 million barrels per day – of which 2.2 come from voluntary cuts.
The production cuts are intended to boost oil prices, but lower-than-expected demand from China, as well as increased production from the United States in particular, have kept prices low since the cuts were announced. However, it is true that prices have risen at intervals, partly due to geopolitical tensions in the Middle East.
Brent price rose 0.03 percent on Friday morning to $79.98 per barrel, while US West Texas Intermediate crude rose 0.09 percent to $75.53 per barrel. barrel.
– Oil prices were able to achieve some progress in recent days after reassurances from OPEC+ regarding the latest production decision, said market strategist Yeap Jun Rong at online broker IG, and continues:
We expect the price of oil to range between $76 and $80 per barrel, while sentiment tries to stabilize.
“Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff.”
