Oil-producing nations including the Saudi Arabia, Russia on Thursday announced further slash in production next year with an effort to prop up volatile prices.
However, prices dropped right after the meeting, with analysts saying the market had expected more from the 13-member Organization of the Petroleum Exporting Countries (OPEC) and its 10 partners.
Following the virtual meeting of OPEC+ Ministers, Riyadh announced it would extend its voluntary oil production cut of one million barrels per day until March 2024.
Moscow said it would slash oil exports by 500,000 barrels a day up from 300,000 barrels a day so far until March, following the tough talks.
Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman will also make smaller cuts, OPEC said in a statement.
Following the meeting, prices failed to rally with benchmark WTI falling 3.0 percent briefly.
Amid stuttering global economic growth, analysts had largely expected OPEC+ producers to extend or deepen production cuts into next year to halt the recent slump in prices.
“It’s a bit of a sweet and sour victory for the Saudis,” said Jorge Leon, an analyst with Rystad Energy, adding Riyadh “only managed to convince seven countries to join the voluntary cuts”.
“The market was expecting cuts at least until the end of the first half of the year.”
With the OPEC+ meeting postponed from Sunday to Thursday, Saudi Arabia, which has borne the brunt of the supply cuts, had sought to convince African countries to chip in by accepting lower production quotas.
But Angola and Nigeria were among those countries reluctant to sign up, seeking to step up production to secure vital foreign currency after they agreed in June to reduce their quotas.
Thursday’s meeting also saw major producer Brazil declared as joining OPEC+ from next year, according to a statement by the group.
Brazil’s Energy Minister, Alexandre Silveira, who attended the meeting, called it a “historic moment for Brazil”, but added his ministry still needed to study in detail the invitation to join.
Brazil is among the world’s top 10 producers and has been the largest oil producer in Latin America since 2016.
Its crude production hit a record 3.7 million barrels per day in September, a near 17 percent increase from the same month last year and a 6.1 percent hike from August, according to pricing agency Argus Media.
OPEC+ was born in late 2016 when Russia and nine others joined forces with the Saudi-led OPEC to prop up falling prices.
The cartel faced its biggest crisis in 2020 as countries locked down due to the Covid pandemic, sending oil demand plunging.
The group agreed in April 2020 to slash output by 9.7 million barrels per day in order to boost sagging prices.
It began to raise production again in 2021 as the market improved.
But since last year, OPEC+ has once again implemented supply cuts to boost falling prices.
But investors have warned that cutting production might not be enough to prevent prices from plummeting.
Oil prices are far from the near-$140 a barrel peak reached after the Russian invasion of Ukraine.
But they remain above the average of the last five years, currently hovering at around $80 per barrel after nearly striking $100 in September.
Concerns among producers persist about demand softening owing to slowing economies, particularly China’s, the world’s biggest importer of crude amid mixed signals emerging from Europe and the United States.