OPEC+ has decided to delay a planned increase in oil output for October and November, as announced on Thursday. This move follows a drop in crude prices to their lowest in nine months.
Oil prices have been falling due to concerns over a weak global economy and disappointing data from China, the world’s largest oil importer.
Eight OPEC+ members, which include the Organisation of the Petroleum Exporting Countries and allies led by Russia, were scheduled to raise output from October. They held a virtual meeting on Thursday, where it was agreed to extend their voluntary production cuts of 2.2 million barrels per day for two months, until the end of November 2024.
This decision led to a rise in oil prices by over $1 per barrel, with Brent futures trading above $74 before moderating. On Wednesday, Brent futures had reached their lowest point this year.
The planned October increase of 180,000 bpd was a small part of the 5.86 million bpd OPEC+ is currently withholding, which is approximately 5.7% of global demand. The intention was to support the market amid uncertainty over demand and rising external supply.
Last week, OPEC+ was ready to proceed with the increase, but concerns about fragile market sentiment, potential additional supply, and a weakening demand outlook led to this decision.
OPEC+ ministers will meet on December 1 to decide on policy. Meanwhile, a top ministerial committee met on October 2 to discuss potential changes.
The dispute in Libya over control of the central bank, which has caused a loss of 700,000 bpd, has supported oil prices recently. Weak Chinese demand and a drop in global refining margins have also contributed to the decline.
