OPEC+ Oil Output Plans

By Ahmad Ghaddar, Alex Lawler and Olesya Astakhova

LONDON/MOSCOW (Reuters) – OPEC+ is moving forward with a planned oil output increase starting in October. This decision comes despite sluggish demand, influenced by Libyan outages and pledged cuts by several members to offset overproduction, as reported by six sources within the producer group.

Output Increase Details

Eight OPEC+ members are set to raise production by 180,000 barrels per day in October. This increase is part of a broader strategy to gradually unwind their recent 2.2 million bpd production cuts while maintaining other reductions until the end of 2025.

Demand Concerns

A slowdown in demand, particularly from China, has negatively impacted oil prices, resulting in skepticism among analysts regarding OPEC+’s plans for the October increase. However, the sources indicated that the production hike remains on schedule due to the tightening market conditions resulting from reduced Libyan output and optimistic expectations about potential interest rate cuts by the U.S. Federal Reserve in mid-September.

Market Response

As of Friday, Brent crude prices fell by about $1, trading just below $79 a barrel by 1341 GMT. OPEC previously indicated that future production increases could be paused or reversed if market conditions are not favorable.

Two sources noted that future output hikes will be evaluated monthly.

Upcoming Meetings

OPEC+ has no formal meetings scheduled until October 2, when top ministers from the Joint Ministerial Monitoring Committee will convene. This committee can make recommendations to the broader OPEC+ group.

The planned October increase is relatively minor compared to the 700,000 bpd of offline Libyan oil and the compensatory cuts promised by Iraq, Kazakhstan, and Russia.