What are the repercussions of the end of the OPEC Plus agreement on the oil market and the producers' economy? (Al Jazeera)

Morgan Stanley (the largest US financial institution) expects the price of a barrel of Brent crude to remain supported at levels around $85, as it expects the Organization of the Petroleum Exporting Countries (OPEC) and its allies to continue to curb production and stabilize oil supply largely at current levels.

In a note on Tuesday, analysts at the bank said the market did not have much capacity to absorb more OPEC oil, adding that they had linked demand for OPEC oil in 2024 to 28.3 million barrels per day, unchanged in the level of demand for the fourth year in a row.

Bank analysts now assume that Saudi Arabia will further extend the voluntary cuts until the end of the second quarter of next year, and that it will keep production below its official OPEC quota of 10.5 million bpd in that period.

Saudi Arabia, Russia and other OPEC plus members have already pledged to cut total oil output by 5.16 million barrels per day, or about 5 percent of daily global demand, in a series of steps that began in late 2022.

"Although U.S. production has slowed significantly, we expect non-OPEC supply likely to rise by 1.4 million bpd next year, enough to fully meet global demand growth," the bank's analysts said in the note.

The bank added that it expects oil demand growth to slow in 2024 to about 1.2 million barrels per day as the factors that prompted the increase after the Corona pandemic recede and economic growth remains weak.


Sudden postponement

Surprisingly, OPEC announced in a statement that OPEC Plus postponed its ministerial meeting to determine production policy for next year to November 30 instead of November 26, which led to a further decline in oil prices in global markets.

Brent crude fell in Wednesday's trading by more than $3 a barrel, or about 4%, to fall below the $80 level a barrel.

Earlier in the day, Russian Deputy Prime Minister Alexander Novak revealed his outlook on the global oil market, saying that global oil prices objectively reflect the current situation in the global oil market and the market itself is balanced.

Oil prices have fallen significantly this month. The price fell from around $98 in late September under the weight of rising supplies, concerns about demand and a possible economic slowdown.

Source: Agencies