An upcoming meeting of the OPEC+ panel is anticipated to maintain the current production cut agreement and delay any new adjustments, despite a recent sharp drop in oil prices, according to multiple sources within the producer group.

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, are scheduled to hold an online joint ministerial monitoring committee (JMMC) meeting on Thursday at 10:00 GMT. This session will involve key ministers from OPEC and its major non-OPEC ally, Russia.

“I think it is unlikely that we will see a new change or development in Thursday’s meeting, especially to limit more OPEC+ production,” one insider said, who chose to remain anonymous.

Oil prices have seen a notable decline of approximately 9% this month, falling below $80 per barrel on Tuesday. This drop is attributed to reduced geopolitical tensions and concerns over the robustness of Chinese demand for oil.

In response to inquiries, the Saudi government’s communications office and OPEC’s headquarters in Vienna did not provide immediate comments.

Currently, OPEC+ is implementing production cuts totaling 5.86 million barrels per day (bpd), which represents around 5.7% of global oil demand. These measures have been in place since late 2022 and are part of the group’s strategy to stabilize the market amid fluctuating prices.

During their last meeting in June, OPEC+ extended the cuts of 3.66 million bpd for an additional year, extending through to the end of 2025. The group also decided to prolong the recent 2.2 million bpd reduction by eight member countries by three months, until September 2024.

Looking ahead, OPEC+ plans to gradually unwind the 2.2 million bpd cuts over a year, from October 2024 to September 2025. This phased approach is intended to balance market stability while addressing changes in demand and price dynamics.

The JMMC, consisting of oil ministers from Saudi Arabia, Russia, and other leading producers, convenes every two months and has the authority to recommend policy adjustments. However, the panel’s focus this week is expected to remain on maintaining the existing production cut framework rather than introducing new changes.

As global oil markets continue to navigate through fluctuating prices and varying demand forecasts, OPEC+ remains central to efforts aimed at managing supply and stabilizing the oil market.

(Adapted from Reuters.com)