Opec+, the world’s largest grouping of oil-producing nations, is leaning towards a modest output boost in December, four sources familiar with the talks said, as they push on with monthly increases aimed at clawing back market share.
Having curbed production over several years in a bid to support the oil market, the group, which includes Russia and Saudi Arabia, started easing those curbs in April.
In a series of monthly increases, eight Opec+ members have boosted output targets by a total of more than 2.7 million barrels per day – or about 2.5 per cent of global supply. That is just under half the 5.85m bpd cumulative cuts in supply the group had agreed in preceding years.
Opec+ in full has 22 members and pumps about half the world’s oil.
The eight are likely to agree on Sunday to increase December output targets by another 137,000 bpd, two of the four sources said, while the other two sources gave no estimate.
The producer group most recently decided to raise targets by 137,000 bpd for November.
Additional supply from Opec+ helped drive oil prices to a five-month low on October 20 on concern that a glut was building. US President Donald Trump, however, imposed new sanctions on Russia’s two largest oil companies last week, spurring a rally above $66 a barrel and easing investor worries about a glut.
The group has found the most recent monthly increases more difficult to agree because sanctions are making it difficult for Russia to find buyers for additional output.
Russia and Saudi Arabia, the two biggest Opec+ producers, have over the past years sometimes disagreed on the size of output rises but ultimately found a compromise.
The group should consider a pause in output target increases to account for the seasonal slowdown in demand heading into the northern hemisphere winter, a fifth source said.
Opec+ comprises the Organisation of the Petroleum Exporting Countries plus Russia and some other smaller producers.
Last month, Russia agreed to the modest 137,000 bpd hike but sources said it was wary of making a larger increase. In late May, Moscow and other producers advocated for a pause in increases, but ultimately agreed a hike.
Trump put pressure on Opec and Saudi Arabia earlier this year to lower oil prices. Sunday’s Opec+ meeting comes ahead of a planned visit next month by Saudi Crown Prince Mohammed bin Salman to Washington, where he’ll meet Trump.
The Opec+ output cuts of 5.85m bpd were made up of three elements: voluntary cuts of 2.2m bpd and 1.65m bpd by the eight members, and a further 2m bpd by the whole group.
The eight producers meeting on Sunday fully unwound one element of those cuts – 2.2m bpd – by the end of September. Since October, they have started removing the second layer of 1.65m bpd of cuts with two monthly increases of 137,000 bpd.
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