OPEC+ reportedly weighing sharp oil output increase from November

OPEC+ is likely to consider a significantly larger increase in oil production from November at its meeting on Sunday. Two sources familiar with the matter said the group would consider raising output by as much as 411,000 barrels per day, three times the increase agreed for October. Reuters reported this today. According to a third source, production could rise by as much as 500,000 barrels per day, but no final decision has yet been made. OPEC+ comprises the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia.

Oil prices are rising, encouraging the group to continue its efforts to strengthen its market share. OPEC+ now accounts for around half of global oil production. Representatives of eight OPEC+ member countries will meet online on 5 October to decide on production levels starting in November.

OPEC+ changed its strategy in April and has already raised production quotas by more than 2.5 million barrels per day. That represents about 2.4 percent of global demand.

A barrel of North Sea Brent crude sold for more than 80 dollars at the start of this year; it is now trading at around 67 USD. In May, however, its price fell as low as 60 dollars. Since April, when OPEC began increasing production, the price has mostly remained within a narrow range of 60 to 70 USD per barrel.

At its peak, total OPEC+ production cuts amounted to 5.85 million barrels per day. The cuts comprised three parts: voluntary reductions of 2.2 million barrels, a further 1.65 million barrels by eight members, and a reduction of two million barrels by the group as a whole. The eight producers now plan to fully unwind the first part of the restrictions, amounting to 2.2 million barrels per day, by the end of September. From October, they will also begin unwinding the second part, amounting to 1.65 million barrels per day.

OPEC+ production is set to increase by 137,000 barrels per day from October. The third wave of production cuts, amounting to two million barrels per day, is expected to remain in place until the end of 2026.