OPEC+ considers postponing oil production increase

• Published On: 26 November 2024 at 22:27

According to delegates, key OPEC+ members are debating delaying the planned restart of oil production in January by several months.

According to unidentified delegates, key OPEC+ countries are unsure whether to proceed with the 180,000 barrel-a-day increase set for January, and may postpone any hikes planned for subsequent months due to fears over a global oil glut.

As a result, oil futures surged by up to 1.9%, momentarily topping $74 per barrel in London, reports Bloomberg.

Saudi Energy Minister Prince Abdulaziz bin Salman met in Baghdad on Tuesday with Russian Deputy Prime Minister Alexander Novak and Iraqi Prime Minister Mohammed Shia Al-Sudani to discuss oil market stability, according to a statement from the Iraqi prime minister's office. OPEC+ is set to meet online on December 1.

Eight OPEC+ members are expected to restart 2.2 million barrels per day in monthly increments beginning in January, a plan that was delayed from October owing to low oil prices. Since late 2022, the business has been restricting output to maintain price stability.

The International Energy Agency predicts a global oil glut next year, even if OPEC+ abandons its planned output increases.

Citigroup Inc. and JPMorgan Chase & Co. warn that prices, which are now above $70 per barrel, will likely fall to $60 or below if OPEC+ raises supply.

According to a Bloomberg study, most traders expect the output rise to be postponed, maybe until the second quarter.
RBC Capital Markets LLC said the delay could last until late in the second quarter.

Following the Baghdad conference, Iraq confirmed its "seriousness and determination to fully comply with the agreement," according to a Saudi Press Agency statement.