OPEC+ members' decision to cut production causes oil prices to plummet

Specifically, Brent crude oil price decreased by 2 USD, equivalent to 2.4%, to 80.31 USD/barrel. Similarly, US WTI crude oil price decreased by 1.9 USD, equivalent to 2.4%, to 75.96 USD.

Brent crude oil prices are trading at 81. — Brent oil price is trading at 80.31 USD/barrel. Photo: screenshot

According to Reuters, countries that produce more than 40% of the world 's oil output such as Saudi Arabia, Russia and other members of OPEC+ have agreed to voluntarily cut production by nearly 2 million barrels/day in the first quarter of 2024.

OPEC+ producers also said the cuts would be gradually lifted after the first quarter of next year if market conditions allowed.

The OPEC+ policy meeting was delayed by four days due to disagreements over output quotas for African producers.

OPEC+ has invited Brazil, one of the world's top 10 oil producers, to become a member of the group. Thus, Brazil will officially join OPEC+ from January 2024.

Extending the decline in oil prices was weak economic data from China, which raised concerns about demand.

According to the National Bureau of Statistics of China, the manufacturing purchasing managers' index (PMI) in November reached 49.4 points, lower than the 49.5 points in October. Along with that, China's manufacturing activity in November decreased for the second consecutive month.

Meanwhile, a report from the US Energy Information Administration (EIA) showed that US crude oil inventories ended November 24 up 1.6 million barrels; distillate inventories up 5.2 million barrels; gasoline inventories up 1.8 million barrels. This shows weak demand.

The EIA report contrasts sharply with the American Petroleum Institute (API) report, which said U.S. crude inventories fell by 817,000 barrels in the week ending November 24.

Domestically, yesterday afternoon, retail gasoline prices were adjusted by the Ministry of Finance and Industry and Trade.

Accordingly, gasoline prices increased and decreased in opposite directions. Specifically, the price of E5 RON 92 gasoline increased by 109 VND/liter, the price of RON 95 gasoline decreased by 34 VND/liter, the price of diesel oil decreased by 87 VND/liter, the price of kerosene increased by 172 VND/liter and the price of fuel oil increased by 91 VND/kg.

In this operating period, the joint ministries continue not to set aside and not to use the Price Stabilization Fund for all petroleum products.

The retail prices of domestic gasoline on December 1 are as follows: E5 RON 92 gasoline is not more than VND 21,799/liter; RON 95 gasoline is not more than VND 22,990/liter; diesel oil is not more than VND 20,196/liter; kerosene is not more than VND 21,116/liter; mazut oil is not more than VND 15,729/kg.

Source