OPEC+ to continue oil supply hike plan

Eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have agreed to collectively increase their production by another 137,000 b/d in November.

IMAGE: An oil pump jack with OPEC's logo in the background. Getty Images

The eight OPEC+ members - Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman - met virtually on 5 October to review global market conditions.

Brent crude’s price has remained largely steady following the OPEC+ announcement as market participants expected a larger output hike, analysts said.

This is the seventh consecutive time that they plan to expedite production, however, it is much lower than the monthly increases of about 547,000 b/d in September.

The coalition rolled out two sets of voluntary production cuts in 2023 – first trimming output by 1.65 million b/d in April, then deepening the curbs by another 2.2 million b/d in November.

The group fully unwound the joint 2.2 million b/d cuts last month, while yesterday’s announcement marks the start of easing the remaining 1.65 million b/d reduction, OPEC said.

“The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation [for overproducing their quotas],” the oil producer added.

Separately, the Saudi Arabia-led group has another 2 million b/d cut by the whole group in place until the end of 2026.

OPEC’s de-facto leader, Saudi Arabia, is now slated to produce around 10 million b/d in November – the same as October. Russia will produce 9.5 million b/d, while Iraq and the UAE will produce 4.3 million b/d and 3.4 million b/d, respectively, the OPEC secretariat said.

The eight countries will meet again on 2 November to decide on December production levels, according to the OPEC statement.

By Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online