Oil prices rise as OPEC+ cartel nears deal on production cuts

Crude oil prices have started firming up again in the international market as the OPEC+ cartel is reported to be on the verge of signing an agreement to cut production by 2 million barrels per day.

OPEC+ members agreed to make 1 million barrels a day of additional oil-supply cuts to go alongside Saudi Arabia’s much-anticipated extension of a voluntary reduction of the same size, financial news agency Bloomberg reported.

The members have agreed to this in principle and it now goes to a vote at the meeting, the report added.

Oil prices rose by 1.4 per cent to $84.22 a barrel on Thursday as the market factored in the OPEC+ meeting.

India imports over 80 per cent of its oil requirement and any increase in price causes the oil import bill to shoot up and weakens the rupee as the demand for the US dollar also goes up to finance the oil purchases of crude.

Saudi Arabia has been pushing for production cuts as oil prices have dropped from near $98 in late September amid concerns over slower economic growth and increased supply in the market.

OPEC+ fears have been stoked by forecasts, including by the International Energy Agency, about oil prices declining further in 2024 due to a sharp slowdown in demand growth.

Saudi Arabia, Russia and other members of OPEC+ have already pledged total oil output cuts of about 5 million bpd in a series of steps that started in late 2022 and see this as the way to prop up prices.