(Bloomberg) -- OPEC+’s decision to delay the revival of its oil production was aimed at offsetting a seasonal demand lull early next year, Saudi Arabia’s energy minister said.
“The first quarter is not a good quarter to bring volumes,” Prince Abdulaziz bin Salman told CNBC in an interview. “That quarter is known to be a quarter for building stocks.”
OPEC+ agreed on Thursday to postpone a series of modest output increases from January to April, and slow the pace of those hikes when they eventually begin. Global oil demand typically begins to ease in the first quarter once winter fuel consumption tails off.
For several months, the group has been seeking to restore output halted over the past two years, but been frustrated as faltering demand in China and swelling supplies from the Americas pressure crude prices. Many analysts predict that global oil markets will still face a surplus in 2025 even if OPEC+ doesn’t raise output.
Despite deciding to postpone, Prince Abdulaziz said that the alliance “honestly believe the market next year will be better than what is being projected.”
Oil traders have shown a lukewarm reception to Thursday’s decision, with futures declining in London to a two-week low below $72 a barrel.
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