OPEC+ to maintain planned output increase
Published: 03:08 PM,Aug 31,2024 | EDITED : 07:08 PM,Aug 31,2024
OPEC __Reuters
London: OPEC+ is set to proceed with its planned oil production increase in October, according to multiple sources within the producer group. This decision comes despite concerns over slowing demand growth and recent supply disruptions in Libya.
Eight OPEC+ members are scheduled to boost their output by 180,000 barrels per day (bpd) in October as part of a gradual unwinding of their most recent output cuts. While a slowdown in demand, particularly in China, has weighed on oil prices, the sources indicated that the October increase remains on track.
The loss of Libyan output and pledged cuts by Iraq, Kazakhstan, and Russia have tightened the market, bolstering confidence in the OPEC+ plan. Additionally, hopes of a U.S. Federal Reserve interest rate cut in mid-September are expected to stimulate economic growth and support oil demand.
OPEC, the Saudi government communications office, and the office of Russian Deputy Prime Minister Alexander Novak did not immediately respond to requests for comment.
One source noted, 'While demand uncertainties persist, there is optimism that a Fed interest rate cut will boost economic growth.' Brent crude prices fell by about $1 on Friday, trading just below $79 a barrel by 1341 GMT.
OPEC has previously stated that it could pause or reverse the production hikes if it determines that the market is not strong enough. Two sources indicated that future output increases will be decided on a month-by-month basis.
OPEC+ does not have any formal talks scheduled until the Joint Ministerial Monitoring Committee meets on October 2. The JMMC can make recommendations to the wider OPEC+ group.
The planned increase for October represents only a fraction of the 700,000 bpd of offline Libyan oil output and the compensation cuts pledged by Iraq, Kazakhstan, and Russia. __Reuters
Eight OPEC+ members are scheduled to boost their output by 180,000 barrels per day (bpd) in October as part of a gradual unwinding of their most recent output cuts. While a slowdown in demand, particularly in China, has weighed on oil prices, the sources indicated that the October increase remains on track.
The loss of Libyan output and pledged cuts by Iraq, Kazakhstan, and Russia have tightened the market, bolstering confidence in the OPEC+ plan. Additionally, hopes of a U.S. Federal Reserve interest rate cut in mid-September are expected to stimulate economic growth and support oil demand.
OPEC, the Saudi government communications office, and the office of Russian Deputy Prime Minister Alexander Novak did not immediately respond to requests for comment.
One source noted, 'While demand uncertainties persist, there is optimism that a Fed interest rate cut will boost economic growth.' Brent crude prices fell by about $1 on Friday, trading just below $79 a barrel by 1341 GMT.
OPEC has previously stated that it could pause or reverse the production hikes if it determines that the market is not strong enough. Two sources indicated that future output increases will be decided on a month-by-month basis.
OPEC+ does not have any formal talks scheduled until the Joint Ministerial Monitoring Committee meets on October 2. The JMMC can make recommendations to the wider OPEC+ group.
The planned increase for October represents only a fraction of the 700,000 bpd of offline Libyan oil output and the compensation cuts pledged by Iraq, Kazakhstan, and Russia. __Reuters