OPEC+ agrees to delay October oil production increase by two months, Reuters sources say

By Ahmad Ghaddar, Olesya Astakhova and Alex Lawler

LONDON (Reuters) – OPEC+ has agreed to delay a planned increase in oil output to October and November after crude prices hit a nine-month low, three sources at the producer group told Reuters on Thursday. .

Oil prices fell along with other asset classes on concerns about a weak global economy and poor data from China, the world’s biggest oil importer. (OR)

“Two months late,” said one of the sources. The three sources declined to be identified by name.

The news lifted oil prices by more than $1 a barrel, with futures trading at $73.72 a barrel by 1508 GMT. It fell to its lowest level this year on Wednesday.

OPEC+’s planned increase was 180,000 barrels per day (bpd), a fraction of the 5.86 million bpd it is holding back, equal to about 5.7% of global demand, to support the market amid uncertainty about of demand and the growing supply outside the country. group.

Last week, OPEC+, which is made up of the Organization of the Petroleum Exporting Countries and allies led by Russia, was set to continue with the increase.

But fragile oil market sentiment on the prospect of more supply from OPEC+ and the end of a dispute halting Libyan exports, along with the prospect of weaker demand, raised concerns within the group.

OPEC+ ministers hold a full meeting of the group to decide policy on December 1. A group of top OPEC+ ministers has convened a Joint Ministerial Monitoring Committee that can recommend changes to meet on October 2.

CONCERN CHINA

A dispute between rival factions in OPEC producer Libya over control of the central bank, which has resulted in a loss of at least 700,000 bpd of output, has supported oil in recent weeks.

However, prices fell about 5 percent on Tuesday on news that a possible deal to resolve the conflict was in the works. Declining Chinese demand and a drop in global refining margins, which could prompt refiners to process less crude, also weighed in.

RBC Capital analyst Helima Croft said in a note that it may be prudent for OPEC+ to wait until December before returning additional barrels.

The planned increase for October was to come from OPEC+ members, which agreed in June to begin rolling out the group’s latest level of output cuts – a 2.2 million bpd cut by eight countries – from October 2024 to September 2025.

The remaining 3.66 million bpd cuts agreed in earlier stages will remain in place until the end of 2025.