OPEC+ might agree this weekend to extend the current stated production cuts into the next year, according to reports today.
The oil producers cartel meets on Sunday to thrash out a new round, though the meeting is virtual, leading some analysts to suggest a "nothing to see here approach" will be adopted.
Oil prices have been falling recently and RBC says it sees no appetite for adding more barrels to the market and triggering another price move down for crude.
At current prices, several producers have taken on additional debt and pushed out timelines for some high-profile projects, added the broker.
“Even an incremental +500 kb/d would have our current forecast building inventories consistently from the fourth quarter through the end of 2025,” said RBC.
Series of cuts
OPEC+ has made a series of cuts since late 2022 amid rising output from the US and other non-members and currently aims to reduce output by a total of 5.86 million barrels per day, equal to about 5.7% of global demand.
This comprises 3.66 million barrels a day by OPEC+ members until the end of 2024, and 2.2 million bopd of voluntary cuts until the end of June.
A Reuters report suggested the 3.66 million number might be extended into 2025 with the voluntary cuts pushed into the third or fourth quarter of 2024.
Countries making voluntary cuts are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates.
"We would not entirely rule out a plot twist - in the form of a deeper cut - given (Saudi energy minister) Prince Abdulaziz's (bin Salman) penchant for Hollywood twist endings," said Helima Croft from RBC.
Yesterday, the Saudi government said it would sell a US$13 billion stake in oil giant Aramco to help fund its ambitious country development plans.
Brent crude was down 0.2% at US$81.70 a barrel today.