OPEC+ is set to continue increasing oil production in December, sources told Reuters

By Maha El Dahan, Olesya Astakhova and Alex Lawler

DUBAI/LONDON (Reuters) – OPEC+ is set to push ahead with an oil output hike in December as the impact will be small if a plan for some members to make bigger cuts to offset overproduction is delivered in September and next, two OPEC+ sources said Thursday.

The Organization of the Petroleum Exporting Countries and allies such as Russia, known as OPEC+, are set to raise production by 180,000 barrels a day in December, part of a plan to begin to roll back their most recent level of output cuts.

Two OPEC+ members, Iraq and Kazakhstan, pledged to make additional cuts of 123,000 bpd in September and further cuts in coming months to offset earlier pumping above agreed levels.

“When the compensation plan and the production numbers from those countries become clear for September, then that will allow the increase because the impact of the increase will be negligible,” one of the OPEC+ sources said, referring to the December increase.

The Saudi government’s communications office and OPEC headquarters did not immediately return requests for comment.

Earlier on Thursday, the Financial Times, citing people familiar with Saudi thinking, reported that Saudi Arabia is determined that OPEC+ will raise production as planned on December 1 and lower its unofficial oil price target of $100 a barrel.

OPEC and Saudi Arabia have repeatedly said they do not target a specific price and make decisions based on market fundamentals and in the interest of balancing supply and demand.

The output increase in December is not about regaining market share, but about a small number of countries phasing out their voluntary output cuts, one of the OPEC+ sources said.

Top OPEC+ ministers are scheduled to meet on October 2 to review the market and are not expected to make any policy changes.

Russian Deputy Prime Minister Alexander Novak told Reuters on Thursday there were no changes to OPEC+’s plans to begin phasing out oil production cuts from December.

The ministers could meet again in November, a third OPEC+ source said.