OPEC+ Decision to Extend Production Cuts Boosts Oil Prices: Wells Fargo Analysts
In a recent note, Wells Fargo analysts praised OPEC+’s decision to extend production cuts through the end of 2024 as a positive move for oil prices. This decision, made in response to declining crude prices, shows OPEC+’s commitment to maintaining tight global supply conditions and supporting higher oil prices.
Initially, OPEC+ had planned to unwind 2.2 million barrels per day of production cuts, but recent global economic weakness led to a delay in this reduction. By postponing the changes, OPEC+ aims to balance the impact of sluggish demand and stabilize oil prices.
Wells Fargo remains optimistic about the near-term outlook for oil prices, with price targets for 2024 set at $80–$90 per barrel for WTI crude. They also anticipate a potential $5 increase by the end of 2025 as the macroeconomic environment improves.
While the bank acknowledges some uncertainty about how long OPEC+ can maintain production cuts, they believe that the extension will provide stability to the oil market and support prices through 2024. Overall, the decision is expected to have a positive impact on the oil market in the coming years.