Why Oil Markets Reacted Negatively to the OPEC+ Announcement

On Sunday, the Organisation of Petroleum Exporting Countries and their partners in OPEC+ agreed to extend a set of production cuts first announced last year. The duration of that extension, widely anticipated to cover the second half of 2024, will instead cover the rest of this year and the whole of 2025. In a way, OPEC blinked. The idea of the production cuts was to put a floor under oil prices and, hopefully, help them move higher. With voluntary cuts across eight OPEC members at 2.2 million bpd and group-wide cuts of 3.66 million bpd, the total…