Sources say that OPEC+ is considering a larger increase in oil production
OPEC+ will likely consider a higher oil production increase for November of 411,000 barrels a day at its meeting on Sunday, as the rising oil prices encourages the group to attempt to regain market share.
OPEC+ reversed its previous strategy of cutting output and has already increased quotas to more than 2,5 million bpd or 2.4% of global demand to increase market share. This is in response to pressure from U.S. president Donald Trump, who wants to lower oil prices.
On October 5, eight OPEC+ member countries will meet online to discuss the output for November. OPEC+ is a group of countries that produces about half of the oil in the world, including the Organization of the Petroleum Exporting Countries and Russia.
WINDING DOWN LAYERS CUTS
A jump of 411,000 bpd in November is three times greater than the 137,000 bpd that OPEC+ had agreed to for October. According to a third source, the increase in November could reach 500,000 bpd. Sources added that a final decision had not yet been made.
OPEC+ has reduced its total output by 5.85 million bpd. This is a combination of voluntary cuts of 2.2 millions bpd plus 1.65million bpd from eight members and another 2.0million bpd from the entire group.
Eight producers intend to unwind a portion of these cuts, 2.2 million bpd, by the end September. In October, the eight producers began removing a layer of 1,65 million bpd with an increase of 137,000.
Bloomberg News reported earlier on Tuesday that OPEC+ was considering accelerating production increases by 500,000 bpd in the next three month. On Sunday, it was reported that the November output increase would be at least 137,000 BPD.
On Wednesday, a separate OPEC+ panel called the Joint Ministerial Monitoring Committee will meet online. According to sources, the group will discuss compliance with oil production quotas.
OPEC stated in July that the JMMC did not have decision-making power over production levels. Reporting by Alex Lawler and Dmitry Zhdannikov. David Goodman, Mark Potter and David Goodman edited the report.
(source: Reuters)
