OPEC+ has agreed to delay a planned oil output increase for October and November after crude prices hit their lowest in nine months, three sources from the producers’ group told Reuters on Thursday.
Oil prices have been falling along with other asset classes on concerns about a weak global economy and soft data from China, the world’s biggest oil importer.
“Done,” one of the sources said. The three sources declined to be identified by name.
The news lifted oil prices by over $1, with Brent futures trading at $73.72 a barrel by 1408 GMT. It fell to its lowest this year on Wednesday.
The planned increase was for 180,000 barrels a day, part of around 5.86 million bpd in output OPEC+ is holding back equivalent to about 5.7% of global demand. Last week, OPEC+, which is made up of the Organization of the Petroleum Exporting Countries and allies led by Russia, was set to proceed with the increase. Fragile oil market sentiment over the prospect of more supply from OPEC+ and an end to a dispute halting Libyan exports, coupled with a weakening demand outlook, have raised concern within the group. HSBC said in a report that any decision by OPEC+ might be taken negatively by the market.
“Raising production would tip the market into a meaningful surplus from the first quarter 2025 onwards. On the other hand, holding off may be interpreted as a belated admission by OPEC that oil demand is weak.”
RBC Capital analyst Helima Croft said in a note that it may be prudent for OPEC+ to wait until December before returning extra barrels.
The planned October increase was set to come from OPEC+ members who agreed in June to start unwinding the group’s most recent layer of output cuts – a cut of 2.2 million bpd by eight countries – from October 2024 to September 2025.
The remaining cuts of 3.66 million bpd, agreed in earlier steps, will remain in place until the end of 2025.