OPEC+ Confirms it Has No Specific Price Target For Crude Oil

On September 27, 2024, 6:50 AM

Despite recent rumors, sources within OPEC+ have confirmed there’s no specific price target for crude oil, including the oft-discussed $100 per barrel.

This comes in response to speculation that Saudi Arabia, a key player in the group, may allow lower prices to reclaim market share by boosting production. Anonymous OPEC+ members who spoke to Argus today quickly dismissed these claims, insisting that their strategy is driven by market fundamentals, such as the five-year average of global crude inventories, rather than a set price.

A Financial Times report suggesting Saudi Arabia is ready to abandon its unofficial $100 oil price target was met with firm denials from anonymous OPEC+ insiders. They clarified that the $100 figure refers to estimates of Saudi Arabia’s breakeven price to cover its spending, not a price target for global crude. The International Monetary Fund (IMF) had placed Saudi’s breakeven oil price at $96.20 for 2024, highlighting that this figure is indicative but not definitive of the Kingdom’s financial strategy.

OPEC+ has remained focused on balancing the market through voluntary production cuts. Originally, the group planned to start unwinding these cuts in October, but concerns about global economic weakness, particularly in China, led to a two-month delay. Despite pressure on countries like Iraq and Kazakhstan to meet their output targets, OPEC+ insists its decision-making will continue to be guided by economic realities rather than chasing short-term gains in market share.

As the global oil market faces uncertainty, all eyes are on whether OPEC+ will proceed with unwinding cuts in December. While some observers speculate about a shift in strategy, sources maintain that any decision will be based on the latest market data, ensuring that discipline remains central to the group’s approach.