OPEC and its allies have pushed back to this Thursday (December 5) a virtual meeting to review their ongoing production curbs, from its original schedule of December 1. The delay was tied to conflicts with the 45th Gulf Summit in Kuwait that was held on December 1.
The OPEC alliance has routinely convened to evaluate the impact on market balances from its supply curtailments, some of which date back to the pandemic. In a meeting last month, eight countries agreed to extend their output cuts through the end of this year. The group had planned to slowly phase out a round of voluntary cuts amounting to 2.2 MMb/d that were announced in November 2023 from the new year.
The output management program is aimed at balancing output with global demand, which had slumped during the health crisis roughly four years ago. More recently, worries about softening Chinese demand have influenced decisions to retain some curtailments.
In its November report, the International Energy Agency said Chinese demand contracted for a sixth month in September. This slowdown has been the main drag on global demand growth; China’s oil consumption growth this year is expected to average just a tenth of the 1.4 MMb/d increase it registered in 2023. It’s worth noting that China’s strong consumption growth last year was partly on the heels of its recovery from the pandemic.
