OPEC+ set to make another accelerated oil output hike for August, sources say
LONDON/MOSCOW/DUBAI: The world's largest group of oil producers, OPEC+, is set to announce another big increase of 411,000 barrels per day in production for August as it looks to regain market share, four delegates from the group told Reuters.
If the increase is agreed, it would bring the total rise in supply from OPEC+ to 1.78 million bpd so far this year, equivalent to over one and a half per cent of total global demand.
The group has not yet increased production by the volumes agreed because some members are compensating for previous overproduction and others need longer to bring output back online.
The group has made a radical change in policy this year, after several years of output cuts totalling more than 5 million bpd.
This came when eight members started to unwind their most recent output cut of 2.2 million bpd starting in April and accelerated the production hikes in May, June and July, despite the extra supply weighing on crude prices.
The change came after some members, such as Kazakhstan, produced way over their targets, angering other members that were sticking more closely to agreed cuts.
OPEC and its allies including Russia, together known as OPEC+, are also seeking to win back market share during the period of cuts when rival producers such as the US boosted production.
Russian President Vladimir Putin said on Friday that OPEC+ projects rising global demand, especially in the summer, suggesting the group may continue with big output hikes.
The group of eight, which includes Saudi Arabia, Russia, Kuwait, Iraq, the United Arab Emirates, Kazakhstan, Oman and Algeria, will meet on July 6.
Analysts at Energy Aspects and Helima Croft at RBC Capital Markets expect an August hike of 411,000 bpd.
"We do think the group is most likely to still go ahead with the August accelerated unwinding," said Richard Bronze, head of geopolitics at Energy Aspects.
OPEC and authorities in Saudi Arabia did not immediately respond to requests for comment.
Two sources familiar with OPEC+ discussions who spoke on condition of anonymity said the group may discuss a more than 411,000 bpd increase for August, although it was not clear that all members supported such a move.
One complicating factor for the talks is the potential for more supply from Iran after the Israel-Iran ceasefire.
US President Donald Trump said on Wednesday that the US had not given up its maximum pressure on Iran, but signalled a potential easing in enforcement to help the country rebuild.
Oil hit a five-month high above US$81 on June 23 after the US attacked Iran's nuclear facilities, only to fall back to US$68 on Friday as the Israel-Iran ceasefire reduced tensions and supply risks.
In April it fell to a four-year low below US$60 after OPEC+ said it was tripling its output hike in May and as Trump's tariffs raised concerns about global economic weakness.
OPEC+ pumps about half of the world's oil. As of their decision for July output, the OPEC+ eight have made or announced production increases totalling 1.37 million bpd, or 62 per cent of the 2.2 million bpd cut they are unwinding.
The UAE is also increasing output by 300,000 bpd, bringing the total hike to 2.5 million bpd.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
7 hours ago
- New Straits Times
OPEC+ set to make another accelerated oil output hike for August
LONDON/MOSCOW/DUBAI: The world's largest group of oil producers, OPEC+, is set to announce another big increase of 411,000 barrels per day in production for August as it looks to regain market share, four delegates from the group told Reuters. If the increase is agreed, it would bring the total rise in supply from OPEC+ to 1.78 million bpd so far this year, equivalent to over one and a half per cent of total global demand. The group has not yet increased production by the volumes agreed because some members are compensating for previous overproduction and others need longer to bring output back online. The group has made a radical change in policy this year, after several years of output cuts totalling more than 5 million bpd. This came when eight members started to unwind their most recent output cut of 2.2 million bpd starting in April and accelerated the production hikes in May, June and July, despite the extra supply weighing on crude prices. The change came after some members, such as Kazakhstan, produced way over their targets, angering other members that were sticking more closely to agreed cuts. OPEC and its allies including Russia, together known as OPEC+, are also seeking to win back market share during the period of cuts when rival producers such as the US boosted production. Russian President Vladimir Putin said on Friday that OPEC+ projects rising global demand, especially in the summer, suggesting the group may continue with big output hikes. The group of eight, which includes Saudi Arabia, Russia, Kuwait, Iraq, the United Arab Emirates, Kazakhstan, Oman and Algeria, will meet on July 6. Analysts at Energy Aspects and Helima Croft at RBC Capital Markets expect an August hike of 411,000 bpd. "We do think the group is most likely to still go ahead with the August accelerated unwinding," said Richard Bronze, head of geopolitics at Energy Aspects. OPEC and authorities in Saudi Arabia did not immediately respond to requests for comment. Two sources familiar with OPEC+ discussions who spoke on condition of anonymity said the group may discuss a more than 411,000 bpd increase for August, although it was not clear that all members supported such a move. One complicating factor for the talks is the potential for more supply from Iran after the Israel-Iran ceasefire. US President Donald Trump said on Wednesday that the US had not given up its maximum pressure on Iran, but signalled a potential easing in enforcement to help the country rebuild. Oil hit a five-month high above US$81 on June 23 after the US attacked Iran's nuclear facilities, only to fall back to US$68 on Friday as the Israel-Iran ceasefire reduced tensions and supply risks. In April it fell to a four-year low below US$60 after OPEC+ said it was tripling its output hike in May and as Trump's tariffs raised concerns about global economic weakness. OPEC+ pumps about half of the world's oil. As of their decision for July output, the OPEC+ eight have made or announced production increases totalling 1.37 million bpd, or 62 per cent of the 2.2 million bpd cut they are unwinding. The UAE is also increasing output by 300,000 bpd, bringing the total hike to 2.5 million bpd.
New Straits Times
7 hours ago
- New Straits Times
Oil steadies after report of planned OPEC+ August output hike
HOUSTON: Oil prices edged up slightly on Friday, recovering from a midday drop into negative territory following a report that OPEC+ was planning to hike production in August, but tumbled about 12 per cent in the week in their biggest drop since March 2023. Brent crude futures settled at US$67.77 a barrel, up 4 cents, or 0.1 per cent. US West Texas Intermediate crude finished up 28 cents, or 0.4 per cent, at US$65.52 a barrel. Four delegates from OPEC+, which includes allies of the Organization of the Petroleum Exporting Countries, said the group was set to boost production by 411,000 barrels per day in August, following a similar-size output increase already planned for July. "The report about an OPEC increase came out and prices cratered," said Phil Flynn, senior market analyst with Price Futures Group, about the midday slide. Crude prices were already headed for a 12 per cent decline for the week following the ceasefire between Israel and Iran. During the 12-day war that started after Israel targeted Iran's nuclear facilities on June 13, Brent prices rose briefly to above US$80 a barrel before slumping to US$67 a barrel after US President Donald Trump announced an Iran-Israel ceasefire. "The market has almost entirely shrugged off the geopolitical risk premiums from almost a week ago as we return to a fundamentals-driven market," said Rystad analyst Janiv Shah. Flynn said expectations of higher demand in the coming months gave crude a boost earlier on Friday. "We're getting a demand premium on oil," Flynn said. Prices had also been supported earlier in Friday's session by multiple oil inventory reports that showed strong draws in middle distillates, said Tamas Varga, a PVM Oil Associates analyst. US government data on Wednesday showed crude oil and fuel inventories fell last week, with refining activity and demand rising. Meanwhile, data on Thursday showed that independently held gasoil stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell to their lowest in over a year, while Singapore's middle distillates inventories declined as net exports climbed week on week. Additionally, China's Iranian oil imports surged in June as shipments accelerated before the Israel-Iran conflict and demand from independent refineries improved, analysts said. China is the world's top oil importer and biggest buyer of Iranian crude. It bought more than 1.8 million barrels per day of Iranian crude from June 1–20, according to ship-tracker Vortexa, a record high based on the firm's data. The US oil and natural gas rig count, an early indicator of future output, fell for a fourth straight month to its lowest since October 2021, Baker Hughes said. The number of oil rigs fell by six to 432 this week, also the lowest level since October 2021.
New Straits Times
8 hours ago
- New Straits Times
OPEC+ set to make another accelerated oil output hike for August, sources say
LONDON/MOSCOW/DUBAI: The world's largest group of oil producers, OPEC+, is set to announce another big increase of 411,000 barrels per day in production for August as it looks to regain market share, four delegates from the group told Reuters. If the increase is agreed, it would bring the total rise in supply from OPEC+ to 1.78 million bpd so far this year, equivalent to over one and a half per cent of total global demand. The group has not yet increased production by the volumes agreed because some members are compensating for previous overproduction and others need longer to bring output back online. The group has made a radical change in policy this year, after several years of output cuts totalling more than 5 million bpd. This came when eight members started to unwind their most recent output cut of 2.2 million bpd starting in April and accelerated the production hikes in May, June and July, despite the extra supply weighing on crude prices. The change came after some members, such as Kazakhstan, produced way over their targets, angering other members that were sticking more closely to agreed cuts. OPEC and its allies including Russia, together known as OPEC+, are also seeking to win back market share during the period of cuts when rival producers such as the US boosted production. Russian President Vladimir Putin said on Friday that OPEC+ projects rising global demand, especially in the summer, suggesting the group may continue with big output hikes. The group of eight, which includes Saudi Arabia, Russia, Kuwait, Iraq, the United Arab Emirates, Kazakhstan, Oman and Algeria, will meet on July 6. Analysts at Energy Aspects and Helima Croft at RBC Capital Markets expect an August hike of 411,000 bpd. "We do think the group is most likely to still go ahead with the August accelerated unwinding," said Richard Bronze, head of geopolitics at Energy Aspects. OPEC and authorities in Saudi Arabia did not immediately respond to requests for comment. Two sources familiar with OPEC+ discussions who spoke on condition of anonymity said the group may discuss a more than 411,000 bpd increase for August, although it was not clear that all members supported such a move. One complicating factor for the talks is the potential for more supply from Iran after the Israel-Iran ceasefire. US President Donald Trump said on Wednesday that the US had not given up its maximum pressure on Iran, but signalled a potential easing in enforcement to help the country rebuild. Oil hit a five-month high above US$81 on June 23 after the US attacked Iran's nuclear facilities, only to fall back to US$68 on Friday as the Israel-Iran ceasefire reduced tensions and supply risks. In April it fell to a four-year low below US$60 after OPEC+ said it was tripling its output hike in May and as Trump's tariffs raised concerns about global economic weakness. OPEC+ pumps about half of the world's oil. As of their decision for July output, the OPEC+ eight have made or announced production increases totalling 1.37 million bpd, or 62 per cent of the 2.2 million bpd cut they are unwinding. The UAE is also increasing output by 300,000 bpd, bringing the total hike to 2.5 million bpd.
