Benchmark oil prices are moderately falling on Friday morning after a sharp decline on Thursday, as investors continue to assess the outcome of the OPEC+ ministerial meeting held the day before.
The price of February futures for Brent on the London ICE Futures exchange at 7:14 a.m. is $80.63 per barrel, which is 23 cents lower than at the close of the previous session. The day before, these contracts fell by $2.02 (2.4%) to $80.86 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time fell by 4 cents to $75.92 per barrel. At the end of the previous session, they fell by $1.9 (2.4%) to $75.96 per barrel.
OPEC+ did not change the official quotas following the meeting that ended the day before, while some countries of the group will voluntarily reduce production by 2.2 million barrels per day in the first quarter of 2024. Saudi Arabia will reduce production by 1 million bpd, Iraq – by 223 thousand bpd, UAE – by 163 thousand bpd, Kuwait – by 135 thousand bpd, Kazakhstan – by 82 thousand bpd, Algeria – by 51 thousand bpd, Oman – by 42 thousand bpd.
Russia will extend and deepen its existing export restrictions. Until the end of 2023, there will be a 300 thousand bpd restriction on the export of oil and oil products compared to May-June 2023. The Russian authorities have announced that the country will increase this reduction by another 200 thousand bpd to 500 thousand bpd and extend it to the first quarter of 2024, while oil supplies will be reduced by 300 thousand bpd and oil products by 200 thousand bpd.
“Initially, oil prices jumped on the news of the extension and deepening of oil production cuts, but investors are worried about OPEC’s compliance with the terms of the deal, as well as about the growth in global fuel demand,” wrote Rob Hayworth, Chief Strategy Officer at U.S. Bank Asset Management Group.
