Oil prices held steady following a 2.0 percent decline last week, reflecting market skepticism regarding the potential impact of the new OPEC+ production cuts in reversing recent downturns.
On the first day of the front-month contract, Brent futures for February delivery saw a modest rise of 16 cents, marking a 0.2 percent increase to reach $81.02 per barrel.
Simultaneously, West Texas Intermediate (WTI) futures experienced a 0.33 percent increase, climbing 25 cents to $76.21.
The OPEC+ agreement, ratified on Thursday, outlined plans to eliminate approximately 2.2 million barrels per day (bpd) of oil from the global market in the first quarter of the upcoming year.
This reduction includes an extension from Saudi Arabia and Russia’s continuation of their current voluntary cuts, accounting for 1.3 million bpd.
While OPEC+—a collective responsible for over 40 percent of the world’s oil output—strives to curtail production, concerns loom due to the market’s decline from around $98 in late September, prompted by apprehensions about weakened economic growth in 2024.
Market reception of the news was tepid, clouded by skepticism about compliance given the voluntary nature of the reductions.
Investors also remained wary due to ongoing macroeconomic challenges and prior anticipations for more extensive production cuts.
Greg Newman, the executive chairman of Onyx Capital Group, underscored the necessity for a substantial improvement in global economic data entering the new year, citing it as the primary factor capable of achieving long-term equilibrium in the market.
