KEY POINTS
- OPEC+ may postpone December’s planned 180,000-barrel output hike.
- Low oil prices raise concerns about increasing supply too soon.
- OPEC+ sources hint at the delay, with a decision expected next week.
OPEC+ may delay its planned oil production increase in December due to concerns over weak demand and rising supply, four sources close to the matter told Reuters on Wednesday.
OPEC+ considers delaying December’s oil production increase
The group, which includes OPEC members, Russia, and other allies, had previously scheduled a 180,000-barrel-per-day (bpd) production increase for December after initially postponing it from October due to falling oil prices. However, with prices still under pressure, a decision to delay the increase could be made as early as next week, according to two of the sources.
“The December hike could be postponed as the market is not healthy enough,” one source said.
News of a possible delay helped lift oil prices by more than 2% on Wednesday, though Brent crude continues to trade around $72 a barrel, only slightly above its yearly low reached in September. Requests for comment from OPEC and the Saudi government were not immediately returned. Russian Deputy Prime Minister Alexander Novak’s office declined to comment, though Novak stated earlier this month that it was premature to assess whether the market needed additional oil.
OPEC+ set for December meeting to finalize production decisions
Accroding to Reuters, three sources, all familiar with OPEC+ discussions, suggested the December increase could be delayed by at least a month. A fourth source, an OPEC+ delegate, did not provide a specific timeframe. All sources requested anonymity.
The planned December increase of 180,000 bpd represents only a small fraction of the 5.86 million bpd of output that OPEC+ is currently holding back to stabilize the market, which is about 5.7% of global demand. The group agreed to these cuts in stages beginning in 2022 to support oil prices.
The December increase is set to come from eight OPEC+ members who had agreed in September to start gradually rolling back a recent 2.2 million bpd production cut from December 2024 onward. OPEC+ will maintain its remaining production cuts of 3.66 million bpd through the end of 2025. OPEC+ ministers are scheduled to meet on Dec. 1 to determine future policy.
