Algeria echoed Saudi Arabia’s suggestion that the OPEC+ oil production cuts implemented in November may be extended past their initial deadline of March 2024.
Energy Minister Mohamed Arkab stated in a Wednesday announcement that the alliance’s actions are aimed at stabilizing the global oil market by aligning it with “intrinsic fundamentals” rather than leaving it vulnerable to “irrational fluctuations of speculators.”
This announcement coincided with Russian President Vladimir Putin’s visit to Saudi Arabia, part of a rare foreign trip intended to solidify partnerships with oil-producing nations in the Gulf. Both Russia and Saudi Arabia issued separate statements praising the cartel’s influence on the global oil market.
Despite the November cuts, oil prices have continued to decline due to concerns about ample supply and slowing fuel demand growth. Some traders remain skeptical of the group’s ability to fully implement its pledged cuts.
Saudi Energy Minister Prince Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak have both expressed support for extending the production cuts beyond the first quarter of 2024.
On Wednesday, oil prices hit a five-month low below $70 a barrel in New York. US benchmark West Texas Intermediate dropped as much as 4.2%, reaching $69.31.
Putin’s arrival in Riyadh marked the second leg of his two-nation tour, following his earlier visit to the United Arab Emirates. In Abu Dhabi, he met with President Sheikh Mohammed Bin Zayed Al Nahya, where both leaders emphasized the strong bond and expanding economic ties between their countries.
The potential extension of OPEC+ oil production cuts remains a subject of discussion and speculation. While the alliance aims to stabilize the market and influence prices, uncertainties surrounding global demand and supply levels will continue to play a significant role in shaping the future of oil prices.
