Crude oil prices (CL=F, BZ=F) are falling after OPEC+ announced it will extend its oil production cuts into 2025. Traders widely expected this move, but some of those production cuts will begin to be phased out in the fall of 2024.

Yahoo Finance's Ines Ferré breaks down the OPEC+ decision and how it has started to affect gasoline prices.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Stephanie Mikulich and updated by Melanie Riehl

Video Transcript

Well be plus agreeing to extend most of its production cuts into 2025 in a move to support oil prices.

The country is also extending additional voluntary cuts of 2.2 million barrels per day until the end of September of this year.

And re is standing by with more details on that for us, JNS.

Hey, Shanna and OPEC Plus put out a very detailed plan regarding its production cuts.

Now keep in mind that most market watchers had expected its production cuts to be extended through the end of this year.

So basically what the Oil Alliance has said is that it is going to extend its general production cuts, its official crude cuts into 2025.

And then there are voluntary cuts which are about 2.2 million barrels of output cuts that those would be extended in the third quarter.

But then they would start to phase out on a month by month basis into next year.

So they would be restoring these barrels going into the market.

Now, what have oil prices done because of this?

Well, they have kind of come been very choppy over the last 24 hours or so.

Goldman Sachs is saying that this decision is going to be bearish given the recent increase in inventories when it comes to Oil Third Bridge is saying, look, unless you see an upside in demand, lifting the lifting prior cuts is going to be premature for the markets and then you have JP Morgan that is saying that this is going to be market neutral.

JP Morgan is seeing bullishness going into the third quarter for demand, largely because of bullishness and demand in the third quarter of this year.

But then that you may see demand.

So in 2025 and this is really the tricky balance that OPEC plus has had to do is just balancing this demand and supply in the markets and given the expectations for demand going into next year and also given the spare capacity of some of these OPEC plus members and OPEC plus members that don't want to be losing market share to the US and others, which is what they have seen over the last year.