Opec agrees to output increase, moderates plans due to glut fears
Opec has raised output targets by more than 2.7 million bpd since April but slowed the pace in October and November amid predictions of oversupply
Opec is set to agree on Sunday on another modest increase in oil output targets, three sources familiar with the talks said, as the producers’ group moderates plans to regain market share due to rising supply glut fears.
Opec has raised output targets by more than 2.7 million barrels per day (bpd) – about 2.5 per cent of global supply – since April but slowed the pace in October and November from larger increases amid predictions of a looming oversupply.
New Western sanctions on Opec member Russia are adding to challenges in the discussions, as Moscow may struggle to further raise output after the United States and Great Britain imposed new measures on top producers Rosneft and Lukoil.
Eight Opec members – Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Oman, Kazakhstan and Algeria – are set to agree on Sunday to increase December output targets by 137,000 bpd, the three sources said.
They declined to be named because they are not allowed to speak to the media. A fourth source said a pause in output hikes was also possible.
Oil prices fell to a five-month low of about SS$60 a barrel on October 20 out of concerns that a glut was building, but have since recovered to about US$65 a barrel due to Russian sanctions and optimism over US talks to trade partners.