On Wednesday, crude oil prices fell significantly as worries about demand grew amid broader economic difficulties.

    At 12:28 GMT, the price of Brent crude oil futures fell sharply by $2.02, or 2.22 percent, to $88.90 a barrel. At the same time, according to Reuters, U.S. West Texas Intermediate crude (WTI) fell by $2.10 or 2.35 percent to $87.13 per barrel.

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    A number of factors, including Saudi Arabia and Russia’s ongoing cuts in crude oil production, which are expected to last until the end of the year, and growing concerns about demand because of economic headwinds, are blamed for the decrease in oil prices.

    “Market attention has shifted from the focus on the short-term tightness to the implications of interest rates staying higher for longer, the subdued macro environment that entails, and how OPEC+ plans to deal with that when it meets on November 26th,” said Investec analyst Callum Macpherson in response to the situation.

    Despite pressure from the United States and other sectors advocating for increasing output, OPEC and its allies decided to cut oil output by 2 million barrels per day in November of the previous year, marking the largest drop by OPEC+ since the 2020 COVID-19 deal.

    According to a PremiumTimes report, OPEC announced a “voluntary reduction” of 1.66 million barrels per day in its crude oil production in April, starting in May and lasting until the end of the year.

    The OPEC+ reduction planned in October 2022 will be supplemented by this further cut, according to the Saudi state-run news agency, SPA. OPEC decided to extend this cut until 2024 in June with the intention of stabilizing the oil market and offering long-term direction.

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    The output policy of OPEC+ was not modified by the Joint Ministerial Monitoring Committee (JMMC) on Wednesday. In a statement released after the 50th JMMC meeting, the organization reiterated its adherence to the 35th OPEC and non-OPEC Ministerial Meeting’s (ONOMM) decision to prolong the Declaration of Cooperation (DoC) to the end of 2024.

    The committee appreciated the voluntary contributions of Saudi Arabia and Russia, both of which extended their cuts to the end of December 2023, and emphasized its willingness to take additional measures if necessary.

    Nigeria, a country struggling with income issues, pipeline vandalism, and crude oil theft in its oil-producing regions, is concerned about the drop in oil prices. According to Tajudeen Abbas, Speaker of the House of Representatives, Nigeria lost N16.25 trillion to crude oil theft between 2009 and 2020, which considerably slowed the expansion of the nation’s oil production. Daily losses ranged from 5 to 30 percent of production.

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