VALLETTA, Dec. 1 (Xinhua) — Thursday’s decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, to further cut down oil production next year has left the market disappointed, according to analysts.
OPEC+ announced further production cuts for next year to bolster oil prices that have recently tumbled amid a weakening economic backdrop. Several OPEC+ countries are to additionally cut a total of 2.2 million barrels per day (bpd) for the first quarter (Q1) of 2024, which aims to support the stability and balance of oil markets.
The reductions will be taken from the quotas adopted at the last OPEC+ ministerial meeting in June. It will add to the voluntary output cuts announced by OPEC+ countries in April and will last until the end of 2024, OPEC said in a statement.
Saudi Arabia, the de facto leader of OPEC, will extend its voluntary production cut of 1 million bpd, which has been in effect since July, to the end of Q1 2024. Russia, a leading OPEC ally, will cut its oil exports by 500,000 bpd, up from the current 300,000 bpd, until next March.
Other OPEC+ countries, including Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman, have pledged smaller cuts for Q1 2024, the OPEC said.
Warren Patterson, ING’s head of commodities strategy, noted that instead of seeing further cuts distributed among the whole group, it was left up to individual members to decide whether they would make deeper voluntary supply cuts.
“Our balance sheet shows that the additional voluntary cuts ensure that the marginal surplus that had been forecast for 1Q24 will be erased, and in fact, we now see a small deficit,” Patterson wrote on the ING website.
“This suggests that there is some upside to our current 1Q24 ICE Brent forecast of US$82/bbl and full-year 2024 forecast of US$88/bbl,” he said, “However, this will largely depend on how OPEC+ goes about unwinding these cuts and obviously on how demand plays out next year.”
“While OPEC seemed to build up expectations leading to a sharp rally, at the end of the day the market was skeptical that OPEC could keep its promises,” Phil Flynn, an analyst at the Price Futures Group, said.
Oil prices have slid since October amid concerns about oversupply in a weakening global economic outlook. The international benchmark Brent crude has stayed in the range of low- to mid-80 U.S. dollars a barrel in recent weeks, from this year’s peak of over 90 dollars a barrel in September.
Before Thursday’s OPEC+ ministerial meeting, analysts had expected the oil-producer group to make bigger production cuts next year to support the oil prices.
Crude prices failed to rally after the meeting, with Brent crude edging down 0.32 percent to settle at 82.83 dollars a barrel on Thursday.
Asset & Wealth Management Investment Strategy Group (ISG) at Goldman Sachs believes that the price of a barrel of oil is likely to trade between 70 and 100 dollars for most of 2024. The forecast reflects slowing oil demand growth arising from tighter financial conditions and still elevated U.S. recession odds over the coming year.
SDFC expands funding assistance for reef fishers, related SMEs
The SME Development Finance Corporation (SDFC) has added new categories to the ‘Kandufalhuge Nafaa’ loan facility; specifically “targeted toward supporting the growth and development of reef fisheries”.
SDFC will issue up to a maximum of MVR 700,000 in funding towards the development of reef fisheries; by way of financing either local fishers or small-to-medium (SMEs) enterprises operating in reef fishing activities.
The loan facility is subject to an interest rate of 5% with a six-month grace period, and a 10-year repayment period.
SDFC further highlights that all the vessels financed under the loan would be held as collateral or mortgage.
Expenses exceeding the maximum MVR 700,000 ceiling of the loan facility should be incurred by the debtor, added SDFC.
The facility is specifically targeted for reef fishers, suppliers of reef fish; either processed, packed or frozen to be sold at industrial capacity, exporters, and local suppliers from the atolls.
SDFC further highlighted that the facility is aimed at boosting specific activities of any individual or SME operating in reef fisheries sector, and they include;
- To develop a new vessel or repair existing vessel used in reef fisheries activities
- Installation of engines in vessels used for reef fishing
- Procurement/purchase of equipment used in navigating or commandeering the vessel
- For repairs and modifications of a vessel used in reef fishing
- Procurement/purchase of fish processing machinery and equipment
- Procurement/purchase of packing materials and equipment
Maldivian lowers surfboard transport fees as pledged by President
Island Aviation Services Limited (IASL) has announced the fee reduction for transporting surfboards via the national airline, Maldivian, as pledged by President Dr. Mohamed Muizzu.
As such, the national airline has announced reduced fees for surfboard transportation. Charges for larger surfboards were decreased by 33%, while smaller ones saw a reduction of 66%, marking a tangible step towards supporting local businesses and promoting tourism.
President Dr. Muizzu responded to concerns raised by Surfing Operator Ahmed Rasheed from Gadhdhoo in Gaafu Dhaalu Atoll, during the “Raees ge Javaab” series, where citizens directly engage with the President on various issues.
During the session, Rasheed highlighted the steep fees imposed by the national airline for transporting surfboards, stressing the impact on local businesses in Gaafu Dhaalu Atoll. Acknowledging the significance of the issue, Dr. Muizzu committed to reducing the fees, recognising their adverse effects on surf-related enterprises and the tourism sector. Stressing surfing’s vital role in the Maldives’ economy, particularly in Gadhdhoo, the President swiftly acted to fulfill his pledge.
Govt launches ‘Addu Asseyri Tourism Development Plan’
The Tourism Ministry has launched the ‘Addu Asseyri Tourism Development Plan’, an initiative under the administration’s ‘Hafuthaa 14’ roadmap.
The project was launched in a ceremony attended by Tourism Minister Ibrahim Faisal and Addu City Mayor Ali Nizar in a ceremony held at the Addu City Council on Thursday.
According to the Tourism Ministry, the ‘Addu Asseyri Tourism Development Plan’ is in line with the administration’s ambitious first 100-day pledge to formulate and introduce a specialized tourism project for Addu City.
Developed by CDC Consulting, the comprehensive five-year destination development strategy is accompanied by a detailed situational analysis report.
According to the Tourism Ministry, the plan is strategically crafted to not only enhance tourism in the region, but also to make a substantial contribution to the local economy of Addu, reflecting President Dr. Mohamed Muizzu’s commitment to transformative initiatives.
The plan also encompasses key presidential pledges to Addu city, including the establishment of 6,000 tourist beds, the creation of 10,000 jobs, the revitalization of Shangri-La operations, and the establishment of a seaplane hub within the first year of the presidency.
Tourism Ministry says the initiatives will transform Addu City into a thriving tourism hub, offering unparalleled opportunities for growth and prosperity.
The plan also outlines a range of developments, such as the creation of cultural village, wellness zones, marine protected areas, and hospitality school.
According to the Tourism Ministry, the initiatives not only aim to attract visitors, but also to showcase the rich heritage and natural beauty of Addu City, providing a unique and immersive experience for tourists and locals alike.
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