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OPEC+ likely to prolong oil cuts for Q1, sources say

OPEC+ is likely at its conference on Thursday to extend its newest round of oil output cuts until completion of the first quarter, four OPEC+ sources told Reuters, to supply additional assistance for the oil market.

OPEC+, which pumps about half the world's oil, has been aiming to loosen up output cuts through 2025. Nevertheless, a downturn in international demand and increasing output outside the group pose difficulties to that strategy and have weighed on prices.

It is most likely that this decrease will be extended for the very first quarter, among the sources informed Reuters. All of the sources declined to be identified by name. Another source said the possibility of a longer, six-month extension was unlikely.

OPEC+, which groups the Company of the Petroleum Exporting Countries and allies such as Russia, meets on Thursday to decide its output method.

Despite the group's supply cuts, global oil benchmark Brent crude has mainly remained in a $70 to $80 per barrel variety this year and on Tuesday was trading above $72 a barrel, having strike a 2024 low below $69 in September.

The probability of another OPEC roll of cuts into the first quarter is all but priced in, said John Evans of oil broker PVM.

OPEC+ members are holding back 5.86 million barrels per day of output, or about 5.7% of global need, in a series of steps agreed given that 2022 to support the marketplace.

An output hike of 180,000 bpd - a fraction of the total - was planned for January from the 8 members associated with OPEC+'s latest cuts of 2.2 million bpd. The walking has actually been delayed from October due to falling rates.

Top-level talks within OPEC+ ahead of the meeting, which was earlier set up for Dec. 1, have actually concentrated on the length of a delay to the production hike, sources stated.

Saudi Crown Prince Mohammed bin Salman flew to the United Arab Emirates, the Saudi state news company said on Sunday, the initially such see in 3 years.

A concern that needs to be attended to is a 300,000 bpd output hike for the United Arab Emirates agreed in June that is set up to start in January 2025 and be phased in slowly. The UAE is keen for that to go ahead, the sources stated.

Recently, Saudi Energy Minister Prince Abdulaziz bin Salman, de facto head of OPEC, had a telephone call with Russian Deputy Prime Minister Alexander Novak and Kazakh Energy Minister Almasadam Satkaliyev while in Kazakhstan on an official visit.

Iraq, Saudi Arabia and Russia likewise held talks in Baghdad last week.

(source: Reuters)