The ministerial panel within OPEC+ convened on Oct. 4 and agreed to maintain the current oil output policy. The decision came following commitments from Saudi Arabia and Russia to uphold their voluntary supply reductions in order to bolster the market.
Earlier in the day, Saudi Arabia confirmed its commitment to maintaining voluntary production reductions of 1 million b/d until end-2023, while Russia similarly declared its intention to sustain voluntary oil export cuts of 300,000 b/d until end-December.
The Joint Ministerial Monitoring Committee (JMMC) expressed its full recognition and support for Saudi Arabia’s additional voluntary cut and for extending it until end-December 2023. The committee also acknowledged Russian cuts.
Russian Deputy Prime Minister Alexander Novak said that joint production cuts by Saudi Arabia and Russia would help balance the global oil market.
Rob Thummel, senior portfolio manager at Tortoise Capital, said global oil markets "will remain undersupplied for the foreseeable future which will result in lower inventories assuming global oil demand meets projections.
Global oil demand is a bit seasonal with the first quarter being the weakest quarter in terms of demand so I wouldn’t be surprised if Saudi Arabia and Russia extended their voluntary cuts until the end of first-quarter 2024. Oil is trading lower on concerns that the volumes cuts are a signal of lower demand for oil globally due to a weak global economy,” he continued.
The next meeting of the JMMC (51st) is scheduled for Nov. 26, 2023.
