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Picture: 123RF
Picture: 123RF

Oil prices pared losses on Friday, after falling sharply in early trade and by more than 2% on Thursday, on perceptions that the voluntary oil output cuts agreed to by Opec+ producers were underwhelming.

Brent crude futures for February rose 6c, or 0.1%, to $80.92 a barrel by 8.20am GMT. US West Texas Intermediate crude futures rose 17c, or 0.2%, to $76.13.

Opec+, which pumps more than 40% of the world’s oil, is focusing on reducing output as prices have fallen from about $98 in late September, amid concern about weaker economic growth in 2024 and expectations of a supply surplus.

Saudi Arabia, Russia and other members of Opec+ agreed to voluntary output reduction of 900,000 bpd in addition to extending 1.3-million bpd in production cuts already in place. Delegates had earlier discussed as much as 2-million bpd in new output curbs.

Goldman Sachs said its December forecast for Brent was “moderately tilted” to the downside of its previously estimated range, calling the oil producers' move a “temporary response,” and “difficult to implement.”

“The market had started to price in a large probability of extra cuts, including a potential longer-lasting and official non-voluntary cut,” Goldman said in a note on Friday, but kept its 2024 price outlook due to an expected slowdown in US supply growth and low Opec supply.

Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Kazakhstan and Algeria were among producers who said cuts, which amounted to 2.2-million bpd in total, would be unwound gradually after the first quarter, market conditions permitting.

Separately, Brazil said on Thursday it would join the Opec+ in 2024, though such a move would not bind South America’s largest country to production cuts. 

Reuters

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