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OPEC+ could delay December oil output hike, sources say

Published 31/10/2024, 12:46 am
© Reuters. FILE PHOTO: A 3D printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
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By Alex Lawler, Olesya Astakhova and Dmitry Zhdannikov

LONDON/MOSCOW (Reuters) - OPEC+ could delay December's planned increase to oil production by a month or more, four sources close to the matter told Reuters on Wednesday, citing concern about soft oil demand and rising supply.

The OPEC+ group combining the Organization of the Petroleum Exporting Countries plus Russia and other allies is scheduled to raise output by 180,000 barrels per day in December. It had already delayed the increase from October because of falling prices.

However, prices remain under pressure in part from weak demand, raising concern in the group about adding more supply. A decision to delay the increase could come as early as next week, two of the sources said.

"The December hike could be postponed as the market is not healthy enough," one of the sources said.

The prospect of a further delay to the OPEC+ increase helped to lift oil prices by more than 2% on Wednesday. Even so, Brent crude is trading around $72 a barrel, not far above its lows for the year, reached in September.

OPEC and the Saudi government communications office did not respond immediately to requests for comment.

The office of Russian Deputy Prime Minister Alexander Novak declined to comment. Novak said this month that it was too early to judge whether the market would need more oil.

Three of the sources, who are people familiar with OPEC+ talks, said the December increase could be delayed for a month at least, while the fourth, an OPEC+ delegate, did not specify a time frame. All declined to be identified by name.

The planned increase of 180,000 bpd is a fraction of the 5.86 million bpd of output OPEC+ is holding back, equal to about 5.7% of global demand. OPEC+ agreed those cuts in separate steps since 2022 to support the market.

The December increase is due to come from the eight OPEC+ members who agreed in September to start a gradual unwinding of the group's most recent layer of output cuts - a cut of 2.2 million bpd - from December 2024 into next year.

© Reuters. FILE PHOTO: A 3D printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

The remaining OPEC+ cuts of 3.66 million bpd will remain in place until the end of 2025.

OPEC+ ministers hold a full meeting of the group to decide policy on Dec. 1.

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