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on thursday (september 5th) local time, opec announced on its official website that eight countries participating in the "voluntary production cuts" agreed to extend the plan for two months until the end of november 2024.

the press release also posted a timetable for gradually restoring production starting in december, saying that the 2.2 million barrels per day production cut would be canceled according to the new plan from december 1. but opec added that participating countries can flexibly suspend or revoke these production adjustment decisions as needed.

source: opec official website

in june this year, eight opec+ member countries, including saudi arabia, russia, iraq, the united arab emirates, kuwait, kazakhstan, algeria and oman, decided to extend their voluntary production cuts of 2.2 million barrels per day until the end of september this year.

at that time, the saudi energy minister mentioned that if the organization believes that the market is not strong enough, it may suspend or cancel the "production increase" plan. previously, consulting firm energy aspects pointed out that the recent weakening demand has increased the possibility of opec+ delaying production increases.

it is worth mentioning that libya’s central bank crisis once gave opec+ members hope for tighter supply. but earlier this week, the governor of the libyan central bank declared that the various factions were close to reaching an agreement and were expected to resume oil production soon.

as of press time, international crude oil prices turned to decline during the day, with the main contract price of wti crude oil futures breaking below the $69 per barrel mark, while brent crude oil fell to $72 per barrel. the two major benchmarks have fallen 6.4% and 5.8% respectively this week.

brent crude oil futures main contract price

before opec released its decision, citi analyst anthony yuen wrote in a report, "if opec+ cannot guarantee an indefinite extension of the current production cut policy, the market may lose confidence in the organization's defense of the $70 target."

before the u.s. stock market opened on thursday, the adp employment report, known as the "small non-farm", showed that 99,000 new jobs were added in august. in addition to being lower than market expectations of 145,000, it was also the lowest value since january 2021, which may indicate that the labor market is beginning to become sluggish in a high-interest rate environment.

yesterday, the federal reserve's "beige book", a national economic situation survey report, showed that economic activity in only three of the 12 regions of the united states increased slightly, while the number of regions reporting flat or declining economic activity increased from five in july to nine recently, dampening market expectations for fuel demand.