OPEC+ output cuts may do little to add vigor to the global oil market

Models of oil barrels and a pump jack are displayed in front of a stock graph in this illustration. - Reuters

OPEC and its allies announced additional supply cuts for early 2024 as part of their efforts to prop up the market, but the lukewarm price response so far points to the fact that the oil sector is drawing conclusions from rising production outside the bloc, economic sluggishness as well as gloomy global demand growth outlook.

In a meeting in late November, Saudi Arabia managed to bring several other OPEC+ producers into its 2.2 million b/d voluntary oil supply cuts, while clinching an agreement from Russia to increase its cut in the first quarter of 2024.