Oil kingpin Saudi Arabia extends its production cut into first quarter as OPEC+ leaves its official policy unchanged

The influential Organization of the Petroleum Exporting Countries coalition and its allies, collectively known as OPEC+, on Thursday opted against formally deepening production cuts, while de-facto leader Saudi Arabia extended its 1 million-barrel-per-day voluntary trim into the first quarter.

The policy steps were decided in a virtual meeting delayed by internal disagreements over the baselines — the levels off which quotas are decided — of the OPEC group’s largest west African members, Nigeria and Angola. The spat postponed talks initially scheduled to be held in person in Vienna over the weekend of Nov. 25-26. The baselines of Angola, Nigeria and Congo remain under study.

The OPEC+ alliance had already instituted a 2 million-barrels-per-day cut in place until the end of 2024, with several coalition members voluntarily pledging a further 1.66 million-barrels-per-day decline over that same period.

While OPEC+ has not formally endorsed production reductions, market participants are following the possibility of further voluntary reductions announced by key participants to the coalition. Already, Saudi state media has announced that Riyadh will extend its voluntary cut of 1 million barrels per day, which it has had in place since July, until the end of the first quarter of 2024.

The energy ministry of OPEC member Algeria said it would trim a further 51,000 barrels per day in the first quarter.

This breaking news item is being updated.