OPEC+ countries may increase oil production in October

OPEC+ countries may increase oil production in October

Photo: Reuters/Scanpix, Dado Ruvik

OPEC+ representatives are leaning towards increasing oil production in October. Brent quotes are in the red, analysts are reducing the price forecast for a barrel for 2025.

The fact that OPEC+ member states intend to increase production is reported by Bloombergwith reference to the congress delegates.

Led by Saudi Arabia and Russia, they planned to increase production by 180,000 barrels a day in October. The group has repeatedly stressed that it might back off from such a move given China’s declining demand. Analysts at Citigroup Inc. and Rystad Energy predict that will happen.

But there is no immediate sign that the planned output increase will be delayed, said several senior officials who spoke on condition of anonymity. The political crisis in OPEC member Libya, which has halved output, may have given the cartel room to maneuver. Tripoli’s woes have boosted the market, offsetting concerns about China and ample new supplies from the United States, Guyana and Brazil, Bloomberg reports.

Oil prices have fallen sharply over the past couple of months, with North Sea Brent crude trading below $80 a barrel.

Goldman Sachs this week cut its 2025 average Brent price forecast to $77 a barrel from $82 a barrel, also noting weakening demand in China. U.S. hydrocarbon production is exceeding forecasts, while China’s oil consumption growth is slowing amid increased use of electric vehicles and weaker demand from the petrochemical industry.

Morgan Stanley analysts also expect Brent to remain below $80 a barrel next year and to fall to $75 a barrel by the end of 2025. “The oil market is currently in deficit,” said analysts Martijn Raths and Charlotte Firkins. “However, it is likely to return to equilibrium by the fourth quarter of 2024, and we forecast a surplus in the market in 2025.”

Russia, which receives a third of its budget revenues from oil and gas production, will not increase production along with everyone else. It still needs to compensate for the violation of the agreement on production cuts. The country presented to the OPEC Secretariat a schedule of compensation for uncut production: 10 thousand barrels per day will be compensated in October, 30 thousand bpd in November. Further compensation will begin only in March 2025.

OPEC+ – is an unofficial format formed in November 2016. In addition to OPEC (currently includes Algeria, Venezuela, Gabon, Iraq, Iran, Congo, Kuwait, Libya, UAE, Nigeria, Saudi Arabia and Equatorial Guinea), it includes 11 more countries:

Azerbaijan, Bahrain, Brunei, Brazil, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, South Sudan.

Source: www.dv.ee