OPEC+ members to delay increasing oil production

The OPEC+ alliance of oil producers has shelved plans to postpone several formal and voluntary crude output cuts until 2026 amid a subdued outlook for global demand, according to producer sources and internal documents.

The sources could only speak anonymously because of the sensitivity of the discussions.

Under its formal production strategy, the wider OPEC+ coalition is now limiting its combined production to 39.725 million barrels per day (bpd) until December 31, 2026, after using its ' this quota only throughout 2025.

Eight OPEC+ members will extend their 2.2-million-barrel-a-day voluntary production cut into the first quarter, and begin to gradually hike production between April and September 2026. Several OPEC+ members will also setting off either 1.7-million. barrels-per-day cut until the end of 2026. Previously this latest production decline was only expected to last through 2025.

Despite these sets of production trims and ongoing conflicts that threaten the hydrocarbon-rich Middle East region, global oil prices have been subdued for the better part of this year, under pressure from the perspective of tight demand . The February Ice Brent contract and the January front month Nymex WTI futures were both trading flat at 1:31pm London time, compared to their closing prices on Wednesday.

Adding to the geopolitical uncertainty is the return to the White House of President-elect Donald Trump – who ran his election campaign on promises to further diversify the output of the world's largest oil producer.

“While today's decision by OPEC+ to delay the end of some of its oil production cuts until April 2025 will buy the group some time, the backdrop of weak global oil demand means it could easily recover in a similar position after three months. “, analysts at Capital Economics said in a note.

“In our view, the fundamentals for oil prices remain weak, and the risks to prices are on the downside.”