FX.co ★ OPEC+ poised to raise oil production starting from December

The cartel of major oil exporters is planning to increase oil output rates. Citing informed sources, Reuters reported that OPEC and its allies are ready to raise crude production in December, though the impact of this added supply will be minimal. This scenario may come true if some cartel members dare to cut oil production during the three fall months.

The current agenda of the Organization of Petroleum Exporting Countries and its allies suggests an increase in crude output by 180,000 barrels per day in December. At the same time, two OPEC+ members, Iraq and Kazakhstan, have committed to additional cuts totaling 123,000 barrels per day. These measures are planned for September, with further restrictions expected in the following months. Once the compensation plan and the September production levels of these countries become clear, it will be possible to pump up output, a well-informed source within the cartel noted, referring to the alliance's December plans.

Besides, referring to informed sources, the Financial Times reported that as of December 1, 2024, Saudi Arabia is going to increase production within OPEC+. The kingdom's authorities also intend to abandon the unofficial target price for Brent crude of $100 per barrel.

Importantly, Saudi Arabia, OPEC’s de-facto leader, has repeatedly pointed out that the members do not aim for a specific oil price. They make decisions based on fundamental market indicators, as well as the balance of supply and demand.

According to analysts, the increase in oil production in December is not related to the recovery of market share for alliance members but to the fact that some countries are winding down previous output cuts.

Notably, a meeting of top OPEC+ ministers is scheduled for Wednesday, October 2. Officials will analyze the hydrocarbon market situation. However, analysts do not expect any drastic changes in current policy. According to informed sources, OPEC+ ministers may assemble again in November 2024.