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OPEC+ reached an agreement to make production cuts of an additional 1 million barrels per day and Saudi Arabia agreed to extend its output cuts by 1 million barrels that were due to end on December 31. The Wall Street Journal reports it. On this news, the WTI with delivery in January initially it rose by 1.4% but then suddenly went into reverse.
Everything seems to revolve in some way around production quotas and the intolerance of Saudi Arabia, which took on most of the cuts without reaping the benefits it had hoped for. From autumn 2022, OPEC Plus has committed to withdrawing almost 5 mbd of crude oil from the market (around 5% of global supply), Riyadh alone has carried out a “squeeze” of more than 2 mbd, but the production of group fell by just 1.68 mbd Argus estimates. And the price of a barrel has moved very little over the same period of time.
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