OPEC+ source: already discussing delaying production increase

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Some representatives have revealed that OPEC+ is discussing a delay of a few months before increasing production, with traders expecting the timing of the increase to be the second quarter of next year.

According to some representatives, OPEC + major member countries have begun to discuss postponing the resumption of oil production planned for January next year, may be postponed for several months.

On this news, the two oils recovered and rose more than 1% at one point.

The countries are skeptical that they will be able to resume production in January next year as planned, and with signs of global oversupply, they may have to delay a planned further increase in production for several more months.

On Tuesday, Saudi Energy Minister Prince Abdulaziz bin Salman met with Russian Deputy Prime Minister Alexander Novak and Iraqi Prime Minister Soudani in Baghdad, where they discussed stabilizing the oil market, according to a statement released by the Iraqi Prime Minister’s Office. OPEC+ is scheduled to meet online on December 1.

The eight OPEC+ countries were supposed to resume production at 2.2 million bpd in monthly phases starting next January, a plan that was delayed from October due to low oil prices. The group has been limiting production since late 2022 in an attempt to support oil prices.

The International Energy Agency (IEA) predicts the global oil market will see a new supply glut next year, even if OPEC+ scraps its production increase altogether. Citigroup and JP Morgan warned that oil prices will fall from $73 to $60 a barrel, and that the decline could be even greater if OPEC+ decides to resume production.

A survey last week showed that traders widely expect the production increase to be delayed, possibly until the second quarter of next year. Royal Bank of Canada Capital Markets Inc. said in a report that the production recovery could be delayed until the end of the second quarter of next year.