The energy ministers of heavyweight OPEC+ producers dismissed the bearish market reaction to the group's latest oil production plan, saying that market participants and analysts will realize soon that the alliance did the right thing in communicating its intentions.
While OPEC+ extended this weekend most oil output reductions into 2025, it said it could begin unwinding some voluntary cuts after the end of the third quarter of 2024-subject to market conditions.
Most analysts see the OPEC+ alliance's announcement as bearish for oil prices toward the end of the year because of the plan to begin unwinding some of the cuts. Most analysts don't think there would be market conditions for the group to begin gradually adding supply in the fourth quarter of 2024.
Saudi Energy Minister, Prince Abdulaziz bin Salman, criticized some analyst comments on the deal and said at an event in Russia on Thursday that the market would soon realize that OPEC+ did "the right thing," Bloomberg reported.
At the ongoing St Petersburg International Economic Forum, Russia's Deputy Prime Minister Alexander Novak also said that OPEC+ did the right thing and aimed to quash doubts about the effectiveness of the deal.
"OPEC's decision this weekend is positive for the oil market and helps stabilize it," Novak said, as carried by Russia's TASS news agency.
The decisions create certainty for energy markets for the coming quarter and the coming year, Novak added.
The Russian official reiterated the OPEC+ and Saudi statements that a potential easing of some of the cuts could always be paused or reversed and that the alliance has the opportunity to quickly respond to the market situation.
"Sometimes the market doesn't understand decisions. It takes time to analyze," Suhail Al Mazrouei, Energy Minister of the United Arab Emirates (UAE), said at the forum, as quoted by Bloomberg and TASS.
By Tsvetana Paraskova for Oilprice.com
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Comments
It is market manipulators led by the manipulator-in-chief the United States in cahoots with speculators and oil traders who released a lot of their stocks to depress prices. They were angered by the fact that OPEC+ refused to play into their hands by deepening the cuts thus giving the impression that oil demand is weakening. OPEC+ knows that market fundamentals have never been more solid and global oil demand more robust
As I projected earlier, prices are already on their way to recouping their loses and resuming their surge because market fundamentals will always prevail over manipulations.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert