OPEC+ agreed to ease its oil-output cuts next year more gradually than previously planned, giving a fragile market more time to absorb the extra supply.
A gradual tapering falls short of what had been widely expected before this week: a full three-month delay to the scheduled January output increase. Yet the compromise deal also avoids a breakdown of OPEC+ unity, which had become a growing risk after days of tense talks exposed a new rift between core cartel members, the United Arab Emirates and Saudi Arabia.
The group will add 500,000 barrels a day of production to the market in January — a quarter of what would have occurred under the original plan. Ministers will then hold monthly consultations to decide whether to approve similar-sized output hikes in subsequent months.
The negotiations were difficult, with the meeting postponed by two days and then delayed again on Thursday. And in a sign of tension, Saudi Energy Minister Abdulaziz bin Salman didn’t chair the meeting as usual, leaving his Russian counterpart to do it alone.
“It’s very excruciating, it’s very tiring, it’s sometimes very frustrating,” he said of the talks. Still, the oil market is seeing the “light at the end of the tunnel.”
Source: Bloomberg
