OPEC+ seen sticking to November output plans, despite $80 oil By Reuters
By Ahmad Ghaddar, Olesya Astakhova and Alex Lawler
LONDON/MOSCOW (Reuters) – OPEC+ is likely to stick to an existing deal to add 400,000 barrels per day (bpd) to its output for November when it meets next week, sources said, despite oil hitting a three-year high above $80 a barrel and pressure from consumers for more supply.
The Organization of the Petroleum Exporting Countries, along with its Russian allies, was known as OPEC+. In July, it agreed to boost production by 400,000 barrels each month and phase out the 5.8 million bpd of reductions. The deal was also approved by the Organization of Petroleum Exporting Countries and its allies led by Russia.
Sources said, “So far we have maintained the plan to raise by 400,000 BPD.”
OPEC+ held its regular meetings in September and agreed to maintain the existing plans for an Oct. output increase.
On Wednesday, the OPEC+ Joint Technical Committee will meet to examine market conditions and make recommendations to ministers.
According to sources, OPEC+ ministers will review findings from the JTC and make a final decision after they meet online Monday.
The price of oil rose to $80 per barrel for the first time in three years, thanks to unplanned outages at the United States and strong demand recovery following the pandemic. On Wednesday, prices were just above $80.
On Tuesday, the White House raised concerns over high oil prices in August. It said that they were in dialogue with OPEC, and are looking into ways to reduce it.
India, third biggest oil importer and largest consumer in the world, indicated on Tuesday that it would be more efficient to transition from crude oil prices.
In recent weeks, OPEC member countries Nigeria, Iraq and UAE said that they did not see the need to make any extraordinary changes to the agreement.
JTC agenda also includes the compliance of existing cuts. They stood at 116% as of August. This is a result of several members having domestic restrictions on increasing production. It is likely that the oil market will be tighter.
According to sources, OPEC members Angola and Nigeria, which are major African oil exporters will not be able to increase production to the OPEC+ quota levels by next year, due to maintenance and underinvestment issues.
Any major increase in output by the group would be dependent on those producers who have spare capacity such as Saudi Arabia, the United Arab Emirates and others.
Barclays (LON:) said the demand recovery would outpace OPEC+ moves to taper its curbs “due partly to limited capacity of some producers in the group to ramp up output, which is likely to drive the inventory cushion to the lowest level in decades”.
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