In Sunday’s virtual meeting, the eight OPEC+ countries (Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman) have decided to increase the production of 137,000 barrels per day in October, compared to the additional voluntary adjustments of 1.65 million barrels per day announced in April 2023, “in the light of the stable global prospects and the current fundamental solids of the market, as a reflection of the low oil stocks “, reads a note released by the organization.
1.65 million barrels per day can be returned in part or in full, based on the evolution of market conditions and gradually, specifies the OPEC+.
The countries will continue to “monitor and carefully evaluate market conditions” and, in their continuous commitment to support market stability, have “reiterated the importance of adopting a cautious approach and maintaining maximum flexibility to suspend or cancel the additional voluntary adjustments of the production, including voluntary adjustments previously implemented for the 2.2 million barrels per day announced in November 2023”.
OPEC+ will meet again on October 5, 2025.
Increase in production but a slower pace
The OPEC+ has agreed to further increase the production of oil starting from October, however slowing down the rhythm of the increases compared to the previous months due to a expected weakening of the global demand.
The adjustment of the production of 137,000 barrels per day for the month of October, in fact, is significantly lower than the monthly increases of about 555,000 barrels on September and August and 411,000 barrels on July and June.
“The barrels can be small, but the message is important,” said Jorge Leon, Rystad’s analyst and former Officer of the OPEC. “The increase is less linked to the volumes and more to a signal: the OPEC+ is giving priority to the market share, even at risk of lower prices”.
OPEC+ has “found it easy to increase production when the demand grew in the summer, but the real test will arrive in the fourth quarter, with the expected slowdown of the demand,” said Leon.
Weakening of global demand
Among the main signs of weakening of global demand, stagnant tendencies in the main importer, China, and the cooling of US growth, which could lead to a more contained fuel demand.
In particular, in the USA, it should be remembered that last Friday the data on non-agricultural paychecks were disappointing, which is increasing bets on a cut in interest rates by the Federal Reserve in the meeting of 16-17 September.
Running quotes
After the futures of the Brent oil and the WTI crude oil lost between 3% and 4% last week, in the wake of the fears for slowing down the global demand and the weak US Jop Report, today the Futures of the Brent for November increase by 1.77% to 66.66 dollars per barrel, while the future West Texas intermediate texas are in October of 1.79% to 62.99 dollars per barrel.
