OPEC+ agreed to extend most of its deep oil output cuts well into 2025 as group seeks to shore up market amid tepid demand growth, high interest rates and rising rival US production.

Brent crude oil prices have been trading near $ 80 per barrel in recent days, below what many OPEC+ members need to balance their budgets. Worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies. Organisation of Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, have made series of deep output cuts since late 2022. OPEC+ members are currently cutting output by total of 5.86 million barrels per day (bpd), or about 5.7 percent of global demand. Those include 3.66 million bpd of cuts, which were due to expire at end of 2024 and voluntary cuts by eight members of 2.2 million bpd, expiring at end of June 2024. OPEC+ will gradually phase out cuts of 2.2 million bpd over course of year from October 2024 to September 2025. 

OPEC expects demand for OPEC+ crude to average 43.65 million bpd in second half of 2024, implying stocks drawdown of 2.63 million bpd if group maintains output at April’s rate of 41.02 million bpd.