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Despite OPEC+'s output cut in October, crude prices have continued to slide over growing fears of economic slowdown and demand destruction.
On Sunday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, agreed to stick to its oil output target against the backdrop of sliding crude prices and an imminent Western countries' price cap on Russian oil.
According to a statement released after the 34th OPEC+ ministerial meeting, the oil-producer alliance decided to reaffirm the decision of its previous ministerial meeting in early October, where it agreed to cut production by 2 million barrels per day from November until the end of 2023. The production cut equals about 2 percent of this year's global oil demand.
OPEC+ defended its output cut decision in October, saying it "was purely driven by market considerations and recognized in retrospect by the market participants to have been the necessary and the right course of action towards stabilizing global oil markets."
The United States and other Western countries have accused OPEC+ of pushing up oil prices and fueling inflation after its production cut decision in October, whereas OPEC+ has insisted that the cut was made to stabilize the oil market as crude prices had declined amid a weaker global economic outlook.
OPEC+'s output rollover decision on Sunday was announced amid increasing uncertainties in the oil market, including weakening crude prices and an upcoming price cap on Russian oil imposed by the European Union (EU) and the Group of Seven (G7) countries.
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Despite OPEC+'s output cut in October, crude prices have continued to slide over growing fears of economic slowdown and demand destruction. Both the West Texas Intermediate (WTI) and the Brent crude have hovered around US$80 a barrel in recent weeks, far from their summer peaks of over US$120 a barrel.
On Friday, the EU and the G7 agreed on a US$60 per barrel cap on the price of Russian seaborne crude, which is expected to come into effect on Monday. Under the price cap, insurance, finance and other services for Russian oil shipments will be banned if oil sells for more than US$60 a barrel.
Mikhail Ulyanov, Russia's permanent representative to international organizations in Vienna, said after the EU decision that "starting from this year Europe will live without Russian oil" as "Moscow has already made it clear that it will not supply oil to those countries who support anti-market price cap."
The OPEC+ countries on Sunday also decided to hold their next ministerial meeting on June 4 next year, but said they remain ready to "meet at any time and take immediate additional measures to address market developments and support the balance of the oil market and its stability if necessary."