Will OPEC+ extend output cuts on 2024 Brent highs?

The Organization of the Petroleum Exporting Countries and allies are currently conducting an online joint ministerial monitoring committee meeting to assess the market conditions and members' compliance with output cuts. Amid the recent surge in oil prices, reaching highs of $89 per barrel, analysts are questioning whether there will be a review of output policy. Chinnan Dikwal, the Vice Chair at the African Energy Council, shared his insights on the potential outcomes of the meeting. The meeting agenda includes a review of geopolitical tensions, such as the escalating conflicts in regions like Syria, which have contributed to the current spike in oil prices. Additionally, the Purchasing Managers' Index (PMI) data for the US and China will be analyzed to gauge market conditions. One crucial aspect of the meeting will be assessing countries' compliance with production quotas set by OPEC. Geopolitical tensions have been a significant driver of oil price volatility, with recent developments in Syria and threats of retaliatory attacks from Iran and Hezbollah leading to uncertainty in the market. The conflicts and disruptions in key regions are fueling concerns about the stability of oil supply and demand in the coming months. Analysts are closely monitoring these developments for potential impacts on oil prices. In terms of production volumes, countries like Nigeria have faced challenges in meeting their quotas. Despite ambitious targets set in the past, Nigeria's oil production has experienced setbacks due to issues like crude oil theft and market shocks. President Ahmet Bolatuncu's efforts to secure investment commitments from major oil producers aim to boost Nigeria's production capacity to 2.6 million barrels per day. However, ongoing challenges pose obstacles to achieving this goal. The demand and supply dynamics in the oil market are further complicated by the multitude of geopolitical risks. The recent escalation of conflicts in various regions, including Syria, the Gulf of Aden, and Russia-Ukraine, has heightened uncertainty and created a volatile environment for oil prices. The interplay between macroeconomic conditions and political instability is driving up oil prices and influencing global market trends. Amidst these challenges, positive developments like the Dangote refinery's production commencement offer a ray of hope for the Nigerian oil market. The refinery's entry into the market with diesel and aviation fuel supply has the potential to enhance supply reliability and pricing stability. Dangote's competitive pricing strategy and capacity to displace European refineries in the African market present promising opportunities for the oil industry. As the OPEC+ meeting unfolds and stakeholders navigate the complex landscape of oil markets, strategic decisions will be crucial in addressing the challenges posed by geopolitical tensions and production constraints. The outcome of the meeting and subsequent actions by OPEC+ members will have implications for oil prices and market stability in the months ahead.