Oil prices continue to decline following OPEC+’s underwhelming cuts.

Early Asian trading on Friday saw a decline in oil prices, which continued losses following the voluntary agreement by OPEC+ members to reduce oil output for the first quarter of 2019 that fell short of market expectations.

At morning session February’s Brent crude futures were down 14 cents, or 0.2%, at $80.72 per barrel. At $75.84, U.S. West Texas Intermediate oil futures dropped 12 cents, or 0.2%. For the first quarter of 2024, Saudi Arabia, Russia, and other OPEC+ members—who produce over 40% of the world’s oil—agreed to voluntarily reduce their output by roughly 2.2 million barrels per day (bpd).

However, at least 1.3 million bpd of those reductions were an extension of Saudi Arabia’s and Russia’s pre-existing voluntary limitations. Delegates had earlier stated that new, additional cuts of up to 2 million bpd were being discussed. In an effort to stabilize the market and sustain prices, OPEC+ has already reduced its output by roughly 5 million barrels per day, to about 43 million barrels per day.

Following the meeting, OPEC released a statement stating that the eight producers’ combined restrictions totaled 2.2 million bpd. An extension of the 1.3 million bpd voluntary reduction from Saudi Arabia and Russia is included in this number.

200,000 bpd of the 900,000 bpd of extra cuts that were promised on Thursday come from Russia’s petroleum exports; the remaining amounts are split among the six members.

With prices down from around $98 in late September, OPEC+ is concentrating on reducing output as worries about slower economic growth in 2024 and supply surplus forecasts are growing. There are no signs that the general doom surrounding China’s financial markets and economy will soon end.

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