The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have collectively decided to implement an additional 1 million barrels a day of oil supply cuts, reinforcing Saudi Arabia's recent extension of its equivalent voluntary reduction.

Oil prices moved higher, with WTI trading at $77.82 and Brent crude oil moving around 83.90.

Citing UBS analyst Giovanni Staunovo, Bloomberg noted these developments' potential significance, "If those numbers get confirmed, it shows OPEC+ wants to keep their hands on the oil wheel."

He emphasized the alliance's proactive approach, especially in light of anticipated lower demand at the beginning of 2024.

As the meeting of the Joint Ministerial Monitoring Committee (JMMC) began today, Staunovo notes that OPEC+ could be discussing deeper oil production cuts for the first quarter of 2024 and that total cuts could be close to 2 million barrels per day (bpd).

The decision stemmed from Saudi Arabia's move to enforce a voluntary extra cut of 1 million barrels per day since July.

Thursday, sources close to the Saudi delegation told the Financial Times that Saudi Arabia won provisional approval for additional cuts, to which other OPEC+ members will contribute, too.

The FT noted that Saudi Arabia warned other OPEC+ members that it could unwind its voluntary 1 million bpd cut if other producers don't agree to cut deeper.

Reuters, citing one source, noted that Russia will cut 500,000 bpd, adding that Saudi's output of some 43 million bpd already reflects cuts of about 5 million bpd to support prices and stabilize the market.

The oil prospects have dimmed in the last couple of months due to abundant supplies and a worsening economic situation.

Prices may decline further next year, aligning with predictions from entities like the International Energy Agency, which foresee a significant deceleration in demand growth.