OPEC+ agreement leaves December oil output target unchanged

Oil production targets for December will remain unchanged following an agreement reached on Sunday by the Organization of Petroleum Exporting Countries and its allies (OPEC+).

Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman are the group’s seven key members. An official statement said the group would retain September’s required production levels for December. Saudi Arabia’s allocation stands at 10.478 million barrels per day (bpd), followed by 9.949 million bpd for Russia and 4.431 million bpd for Iraq.

Full compliance with the Declaration of Cooperation remains a collective commitment, OPEC+ reaffirmed. The declaration provides the basis for coordination between OPEC and participating non-OPEC oil-producing countries.

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WTI Oil: Key Questions Answered

What distinguishes WTI Oil?

Traded on international markets, WTI Oil is a grade of crude oil. WTI stands for West Texas Intermediate and is one of three major grades, alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is considered easy to refine. Sourced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, with its price regularly cited in media coverage.

What determines WTI Oil prices?

Supply and demand underpin WTI Oil prices, as they do for other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions caused by political instability, wars or sanctions can also affect prices. Another major influence is the production decisions taken by OPEC, a group of leading oil-producing countries. As oil is traded predominantly in US Dollars, the currency’s value also affects WTI Crude Oil prices: a weaker US Dollar can make oil more affordable, while a stronger currency can have the opposite effect.

Why do inventory figures matter for WTI Oil prices?

WTI Oil prices respond to the weekly oil inventory reports issued by the American Petroleum Institute (API) and the Energy Information Agency (EIA), as movements in stocks reflect shifts in supply and demand. Falling inventories can signal stronger demand and push oil prices higher. Conversely, rising inventories can point to greater supply and put downward pressure on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two sets of figures tend to be similar, with results within 1% of one another 75% of the time. As the EIA is a government agency, its data is regarded as more reliable.

How do OPEC decisions affect WTI Oil prices?

Production quotas agreed by OPEC (Organization of the Petroleum Exporting Countries) often influence WTI Oil prices. The group comprises 12 oil-producing nations, which jointly set quotas for member countries at meetings held twice a year. A reduction in quotas can restrict supply and lift oil prices, whereas an increase in OPEC production has the reverse effect. The wider OPEC+ grouping includes ten additional non-OPEC members, with Russia the most notable among them.