OPEC alliance extends reduced oil production

The Organization of the Petroleum Exporting Countries, or OPEC, agreed on Sunday along with allied nations to extend a cut in oil production.

The decision was made at a meeting of the OPEC Joint Ministerial Monitoring Committee, or JMMC, which comprises representatives from OPEC's 13 core member nations and 11 allied non-member countries.

The 24-nation bloc met at OPEC's headquarters in Vienna, Austria, where delegates mulled the organization's latest report on the oil market following lengthy delays and pre-meeting huddles, the Bloomberg news agency reported.

After seven hours of talks, the JMMC decided OPEC and its allies would extend cuts in crude oil output that were agreed at a previous meeting beyond the initial expiry date of December 2023 into 2024.

The bloc also said it would reduce overall production targets from 2024 by a further total of 1.4 million barrels per day.

Reuters quoted Saudi Arabia's Energy Minister Prince Abdulaziz as saying the country would make an additional voluntary cut in its crude oil production, from July of 1 million barrels a day.

Sunday's gathering of the JMMC followed OPEC's core members holding their 186th regular meeting on Saturday, also in Vienna.

The last face-to-face meeting of OPEC was in October 2022, when delegates decided to cut crude oil production by 2 million barrels a day.

Several OPEC nations followed that up on April 2 with an additional voluntary cut, which Russia's news agency TASS said equated to another 1.66 million barrels a day of reduced output; meaning the organization had already decided to cut production by almost 3.7 million barrels a day before Sunday's meeting.

The Reuters news agency said Sunday's agreement to further cut production was aimed at mopping up what OPEC sees as a glut in the amount of oil available globally, which it says has kept the selling price of oil too low.

OPEC produces around 40 percent of the world's crude oil.

Other major producers that are not part of the OPEC bloc, including the United States, have decided in the past to offset some of the production cuts made by OPEC by ramping up their own production.

The voluntary cut in production announced in April pushed the price of oil up by around $9 a barrel, to $87 a barrel. However, prices settled back down fairly quickly and the cost of international benchmark Brent crude sat at $76 a barrel on Friday, which was close to a selling-price low last seen in December 2021.

The Agence France-Presse news agency quoted United Arab Emirates Energy Minister Suhail Mohamed Al Mazrouei as saying ahead of Sunday's meeting that delegates were looking to "balance the market and ensure we are ready for any challenges in the future".