©Reuters. A view of the entrance to the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, November 30, 2023. REUTERS/Leonhard Foeger
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By Maha El Dahan and Alex Lawler
DUBAI (Reuters) – Some OPEC+ members agreed on Sunday to extend voluntary oil production cuts into the second quarter, sources said, giving further support to the market amid concerns over global economic growth.
In November, OPEC+ agreed to voluntary cuts totaling around 2.2 million barrels per day (bpd) for the first quarter, led by Saudi Arabia confirming its own voluntary cut.
OPEC+ has implemented a series of production cuts from late 2022 to support the market against a backdrop of increased output from the US and other non-member producers and demand concerns as major economies grapple with rates of high interest.
Oil prices found support from rising geopolitical tensions due to attacks by the Iran-aligned Houthi group on Red Sea shipping, although concerns about economic growth and high interest rates weighed. May futures settled up $1.64, or 2%, at $83.55 a barrel on Friday.
Sources told Reuters last week that OPEC+ would consider extending oil production cuts into the second quarter, with one of them saying it was “likely”.
OPEC+ member countries announce cuts individually.
Russia will cut oil production and exports by an additional 471,000 barrels per day (bpd) for the second quarter of 2024, in coordination with some OPEC+ participating countries, Russian Deputy Prime Minister Alexander Novak said on Sunday.
Kuwait said it will cut its oil production by 135,000 barrels per day until June, while Algeria will cut its production by 51,000 barrels per day and Oman will reduce production by 42,000 barrels per day.
The oil demand outlook is uncertain for this year. OPEC expects another year of relatively strong demand growth of 2.25 million barrels per day, led by Asia, while the International Energy Agency forecasts much slower growth of 1.22 million barrels per day.