WTI drops following OPEC+ production cut decision
- WTI dropped more than $3.00 after hitting a daily high of $79.56, shy of the $80.00 per barrel barrier.
- OPEC+ decided to slash Crude Oil production, but at a pace slower than expected by market participants.
- Oil production in the US rose to a monthly record, despite the production contraction in Texas.
The US Crude Oil benchmark WTI tumbles more than 2% on Thursday after the OPEC+ producers agreed to cut production for the first quarter of 2024, though it fell short of market expectations. At the time of writing, WTI is trading at $76.02 after hitting a daily high of $79.56.
WTI crude oil sees a significant drop despite OPEC+ agreement on production cuts for Q1 2024
Saudi Arabia, Russia, and other members of the OPEC+ agreed to cut almost 2 million barrels per day (bpd) for the first quarter of 2024. Hence, the Saudis and Russia committed to extend their 1.3 million barrels cut for the next year.
Oil prices tumbled instead of rising, which suggests disappointment amongst investors. Sources cited by Reuters noted, “For now, the outcome does not live up to the expectation… in recent days.”
The OPEC meeting was postponed last week due to disagreement over output quotas for African producers. The cartel invited Brazil, one of the world’s major producers to become a member of the group.
In the meantime, US Crude Oil production grew by 1.7% in September, to a monthly record of 13.24 million bpd, the US Energy Information Administration (EIA) said. Contrarily, production in Texas shrank 0.1% the agency said, to 5.57 million bpd, the lowest level since July, and the first production contraction since April.