(Reuters) – Members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, united within OPEC+, have agreed to extend the current agreement to cut crude production until the end of the second quarter to avoid oversupply, sources said on Sunday.

In November, OPEC+ agreed to voluntary reductions totaling around 2.2 million barrels per day (bpd) for the first quarter, led by Saudi Arabia which renewed its own voluntary reduction.

OPEC+ has implemented a series of production cuts since late 2022 to support the market in the face of increased production from the United States and other non-member producers and concerns about demand as major economies are facing high interest rates.

Oil prices remained supported due to growing geopolitical tensions linked to attacks by Yemen’s Houthis in the Red Sea, despite concerns over economic growth and high interest rates.

Brent crude futures for May settled at $83.55 a barrel on Friday, up $1.64, or 2 percent.

Sources told Reuters last week that OPEC+ would consider extending oil production cuts into the second quarter, with one saying it was a “likely” possibility. .

OPEC+ member countries announce their reductions separately. Kuwait said it would cut oil production by 135,000 bpd until June, Algeria by 51,000 bpd and Oman by 42,000 bpd.

The oil demand outlook is uncertain for this year. OPEC expects another year of relatively strong demand growth of 2.25 million bpd, driven by Asia, while the International Energy Agency (IEA) forecasts much slower growth of 1.22 million bpd.

(Report by Maha El Dahan and Alex Lawler, written by Yousef Saba; Claude Chendjou and Kate Entringer)

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