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Opec+ members are close to postponing planned increases to oil production for at least two months, as weaker than expected demand pushes prices to around their lowest levels this year.
Key members of the producer group, including Saudi Arabia, Russia and the United Arab Emirates, were due to begin unwinding voluntary output cuts from the start of October but in recent days have been discussing delaying the increases, according to people with knowledge of the deliberations.
While the members are yet to make a final decision, the people said, the group was considering keeping the curbs in place until after Opec+ members have met in person at the next scheduled meeting in Vienna on December 1. An announcement is expected imminently, they added.
The planned increases would have lifted the group’s production by 180,000 barrel a day in October and by 540,000 b/d by the end of the year, as part of plans for a gradual unwinding of 2.2mn of voluntary cuts over the next 12 months.
“Demand indications of late have been very weak, so I wouldn’t rule out delaying the tapering,” said Amrita Sen, director of research at Energy Aspects, a consultancy.
Opec+ members announced the plan to bring back output after its last meeting in June, even as it agreed to extend other production cuts to the end of 2025.
The group, led by Saudi Arabia and Russia, has repeatedly curbed oil output in recent years in an attempt to prop up prices.
Three different sets of cuts mean Opec+ members are currently producing almost 6mn b/d less than their combined capacity, representing about 6 per cent of global supply.
Saudi energy minister Prince Abdulaziz bin Salman in June said the plan to finally roll back some of the curbs could be halted at any time if market conditions soured.
On Wednesday Brent crude closed at $72.70 a barrel, the lowest since May 2023, as soft demand in China and the possible resolution of a dispute in Libya that has halted oil exports further weighed on prices. On Thursday it rose 1.5 per cent to $73.76.
Jorge Leon, a former Opec official now at energy consultants Rystad, said he expected the group to keep production at current levels and reassess next month.
“It would be wise for them to pause for a month and then see what happens in Libya, see what happens in the Middle East, and see what happens with the oil price,” he said.
Helima Croft, head of commodities research at RBC Capital Markets, said it would be “most prudent” for the group to delay the decision for longer, until the Opec+ meeting in December, to allow members to meet and then communicate any decision in person.
“I think the communication mechanism of the public press conference is important for market sentiment” she said. “Written statements can become a kind of Rorschach test where everyone sees what they want to see in the ink blots of the communique.”