Sources say that OPEC+ is leaning toward another small increase in oil production.
Four sources familiar with the discussions said that OPEC+ is likely to increase output modestly in December as it continues with its monthly increases aimed at regaining market share.
After several years of reducing production to support the oil markets, the group that includes Russia and Saudi Arabia began to ease these curbs in April.
Eight OPEC+ member countries have increased their monthly production targets by a combined total of 2.7 million barrels a day - which is about 2.5% global supply. This is less than half of the cumulative supply cuts the group agreed to in previous years, which totalled 5.85 million barrels per day.
OPEC+ is made up of 22 members, and produces about half of the world's crude oil.
SOURCES SEE OUTPUT TARGET BOOST OF 137,000 BPD
Two of the sources indicated that the eight will likely agree on Sunday to raise the December output target by another 137,000 Bpd. The other two sources did not give an estimate. Two of the four sources refused to identify themselves. The other two sources did not give an estimate.
Recently, the producer group decided to increase targets for November by 137,000 bpd.
On Oct. 20, additional supply from OPEC+ pushed oil prices down to a 5-month low, on fears that a glut would build. Last week, U.S. president Donald Trump imposed new sanctions against Russia's largest oil companies, which boosted the price of oil above $66 per barrel. This eased investor concerns about a glut.
The group found it more difficult to agree on the latest monthly increase because sanctions make it difficult for Russia find buyers for any additional output.
Over the years, Russia and Saudi Arabia - the two largest OPEC+ producers - have sometimes disagreed about the size of the output increases, but eventually found a compromise.
OPEC, Alexander Novak's office, and the Saudi Arabian government media office didn't immediately respond to comments.
A fifth source suggested that the group could consider a temporary halt in the increase of output targets to reflect the seasonal decline in demand as we enter the winter months in the northern hemisphere.
OPEC+ is the Organization of Petroleum Exporting Countries plus Russia, and some smaller producers.
MOSCOW WORRIED OF LARGER INCREASES
Sources said that Russia was hesitant to make a bigger increase. Moscow and other producers argued for a pause on increases in late May but eventually agreed to a hike.
Trump put pressure earlier this year on OPEC, Saudi Arabia and other oil producers to lower the price of crude. The OPEC+ gathering on Sunday comes before the Saudi Crown Prince Mohammed bin Salman's planned trip to Washington next month, where he will meet Trump.
The OPEC+ production cuts of 5.85 millions bpd are made up of three components: voluntary cuts by eight members of 2.2 and 1.65million bpd, and a second 2 million bpd cut by the group as a whole.
Eight producers met on Sunday to unwind one of these cuts, 2.2 million bpd. This was completed by the end September. Since October, the eight producers have begun removing a second layer of 1,65 million bpd in cuts by increasing their production twice a month. (Additional reporting and editing by Maha El-Dahan, Simon Webb, Conor Humphries, Alex Lawler)
(source: Reuters)
