OPEC+ set to go ahead with Dec oil output hike, sources say
2024.09.26 09:23
By Maha El Dahan, Olesya Astakhova and Alex Lawler
DUBAI/LONDON (Reuters) – OPEC+ is set to go ahead with a December oil output increase as its impact will be small should a plan for some members to make larger cuts to compensate for overproduction be delivered in September and later months, two OPEC+ sources said on Thursday.
The Organization of the Petroleum Exporting Countries and allies such as Russia, known as OPEC+, is scheduled to raise output by 180,000 barrels per day in December, part of a plan to start unwinding its most recent layer of output cuts.
Two OPEC+ members, Iraq and Kazakhstan, have pledged to make extra cuts totalling 123,000 bpd in September, and additional curbs in future months, to compensate for earlier pumping above agreed levels.
“When the compensation plan and production figures from those countries becomes clear for September then that will allow the increment to come in as the impact of the increment will be negligible,” one of the OPEC+ sources said, referring to the December increase.
The Saudi government’s communications office and OPEC’s headquarters did not immediately return requests for comment.
Earlier on Thursday, the Financial Times, citing people familiar with Saudi thinking, reported that Saudi Arabia is committed to OPEC+ raising production as planned on Dec. 1 and dropping its unofficial $100 a barrel oil price target.
OPEC and Saudi Arabia have repeatedly said they do not target a certain price and make decisions based on market fundamentals and in the interest of balancing supply and demand.
The output increase in December is not about regaining market share, it is about a small number of countries phasing out their voluntary output cuts, one of the OPEC+ sources said.
Top ministers from OPEC+ are scheduled to meet on Oct. 2 to review the market and are not expected to make any changes to policy.
Russian Deputy Prime Minister Alexander Novak told Reuters on Thursday that there were no changes to OPEC+ plans to start phasing out oil production cuts from December.
The ministers could meet again in November, a third OPEC+ source said.
