Oil prices jumped more than $2 per barrel in early Asian trade on Monday as the world's largest oil exporter, Saudi Arabia, decided to slash production by 1 million barrels per day (bpd) following an OPEC+ meeting in Vienna.
On Sunday, OPEC+ reached a deal to extend output cuts into 2024. Saudi Arabia said it will extend its 500,000 bpd voluntary oil cut until the end of 2024. Its output would drop to 9 million bpd in July from around 10 million bpd in May.
"This move will add limited short-term upside price pressure in the coming weeks, according to our projections," Rystad Energy in a note on Sunday.
The UAE will extend its voluntary cut of 144,000 bpd until end 2024. In the OPEC meeting, the UAE was allowed to increase output targets by around 200,000 bpd to 3.22 million.
Iraq will extend its voluntary cut of 211,000 bpd until the end of 2024. The Oman energy ministry stated that it will extend voluntary oil production cut by 40,000 bpd until the end of next year.
Reuters reported that the oil cartel has lowered its oil output target for next year by 1.4 million bpd versus current output targets.
The next OPEC and non-OPEC Ministerial Meeting will be held on Sunday 26 November 2023, in Vienna, the oil cartel said in a statement.
According to reports, formal talks were delayed by at least three hours on Sunday due to members discussions on the side lines about production baselines, from which country quotas and reductions are derived.
Top OPEC members lead by Saudi Arabia were trying to persuade under-producing African nations such as Nigeria and Angola to have more realistic output targets, Reuters reported.
(Writing by Seban Scaria; editing by Daniel Luiz)