BAKU, Azerbaijan, March 18. OPEC+ is expected to favor price stability over production increases, Trend reports via BMI, a Fitch Solutions company.
In a recent decision, OPEC+ has chosen to extend its existing production cuts from March through June 2024. This move aligns with market expectations, yet fails to drive Brent closer to the resistance level at $85 per barrel. While headline compliance with the cuts remains robust, actual performance varies across markets. Countries such as Iraq and Kazakhstan notably surpass their February quotas.
“Looking ahead, potential growth is anticipated in the latter half of the year, contingent upon improvements in global macroeconomic conditions. However, OPEC+ is expected to uphold its stance favoring price stability over production increases. The latest communique from the OPEC Secretariat underscores a gradual unwinding of the cuts, contingent upon market dynamics,” said the company.
Meanwhile, Iranian oil production has experienced a marginal decline in the early months of the year, dropping by 9,000 barrels per day (0.3 percent month-on-month) in January and 15,000 barrels per day (0.5 percent) in February. This trend likely reflects heightened perceived trade risks with Tehran following the Israel-Hamas conflict, coupled with tensions surrounding pricing disputes with key buyers in Mainland China.
“Despite these challenges, Iran's production has shown resilience, maintaining a bullish outlook for the market in the current year. However, any further increases in domestic supply or exports are expected to be limited. Consequently, the risk balance for our forecast now tilts towards the downside,” said BMI.
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