RIYADH: Oil production by members of OPEC+ will increase by a further 100,000 barrels per day from September, Reuters is reporting, citing a source.
The increase will mean the alliance, which includes Russia, will raise output by 748,000 bpd from next month.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, held a meeting on Wednesday to discuss output levels amid calls from the US to ramp up production to cool the international oil market.
As reports of the rise began to circulate, oil futures turned positive.
Brent crude futures were up 0.47 percent at $101.01 a barrel at 02.50 p.m Saudi time, while West Texas Intermediate crude futures climbed 0.66 percent, to $95.08 a barrel.
The meeting of the Joint Ministerial Monitoring Committee of OPEC+ began at just after 13:00 central European time, with an increase in output a key focus of discussions.
The Joint Technical Committee of OPEC+, which includes Russia, trimmed its forecast for a surplus in the oil market this year by 200,000 barrels per day to 800,000 bpd, two delegates told Reuters on Tuesday.
The JTC met on Tuesday ahead of the ministerial meeting of the alliance.
Ahead of the meeting, Bolat Akchulakov, energy minister of OPEC+ member Kazakhstan, floated the idea of increasing production, saying: “We have always said that the preferred price corridor is $60-80 per barrel. Today the price is $100. So we might have to raise output to avoid overheating.”
The market has been largely expecting OPEC+ to keep output steady or opt for a slight increase. Three OPEC+ sources said on Wednesday they still saw little chance for an output policy change when commenting on the Kazakh minister’s statement.
Demand for oil to continue recovery albeit at slower pace, OPEC Sec Gen says
Demand for oil is expected to continue its recovery, albeit at a slower pace than earlier this year and last year, OPEC’s secretary general told Algerian state television ahead of Wednesday’s meeting.
“We are still seeing increased demand for oil… compared to the period of the COVID-19 pandemic in 2020 and 2021. There is post-pandemic recovery, and we are still seeing that but there is a relative decrease in its pace,” Haitham Al-Ghais told the Algerian news channel in remarks aired late Tuesday and posted on social media on Wednesday.
Production policies under discussion
OPEC has been increasing output in line with its targets by about 430,000-650,000 bpd a month in recent months and has refused to switch to speedier output increases.
Group sources have cited a lack of spare capacity among members to add more barrels as well as the need for further cooperation with Russia as part of the wider OPEC+ group.
By September, OPEC+ would have wound down all of the record production cuts it implemented in 2020 to deal with a collapse in demand caused by the coronavirus pandemic.
In June, OPEC+ produced almost 3 million barrels per day less crude than foreseen by its quotas as sanctions on some members and low investment by some others crippled its ability to assuage the worlds energy crisis.
Only Saudi Arabia and the UAE are believed to have some spare capacity left to increase production.
French President Emmanuel Macron has said he had been told that Saudi Arabia and the UAE had very limited ability to increase oil production.