A general view of a sign at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) on February 29, 2024 in Vienna, Austria.
Thomas Kronsteiner | News Getty Images | Getty Images
Members of the OPEC+ oil alliance have postponed a planned increase in production by 180,000 barrels per day in October, as part of a program to gradually return output to the market at 2.2 million barrels per day in the following months.
The production increase has been delayed by two months, according to two OPEC+ sources, who could only speak anonymously because of the sensitivity of the talks.
The 2.2 million barrels per day cut is a short-term voluntary cut made by just eight members of the OPEC+ alliance.
Crude oil futures, which fell earlier in the week, rose on Thursday, with the November Brent crude contract trading at $73.63 a barrel at 3:29 p.m. London time, up 1% from its previous settlement. The October Nymex contract was at $70.17 a barrel, up 1% from its previous close.
The 2.2 million barrel-per-day cut, implemented in the second and third quarters, is set to expire at the end of this month. Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates have implemented the voluntary cuts outside the formal policy that binds all members of the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries and its allies.
Under official policy, OPEC+ will produce a total of 39.725 million barrels per day next year. A group of its members is voluntarily cutting production by an additional 1.7 million barrels per day through 2025.
One of the OPEC+ sources said the details and timeline of the deals have not been adjusted after the latest talks.
Oil prices have been hit by a lackluster recovery in demand from the world’s second-largest economy and top crude importer, China, after the Covid-19 pandemic. On the supply side, key OPEC+ members Iraq and Kazakhstan have repeatedly exceeded their monthly quotas under the cartel’s agreement and have submitted plan to cut additional production to offset these excesses by September 2025.
The power outage in Libya, an OPEC member in North Africa, also upset the fundamental supply-demand landscape, amid ongoing market volatility whether the political impasse that threatens the country’s nearly 1.2 million barrels per day of output can be resolved immediately or persist in the long term.
