OPEC+ Balances Act: Modest Output Increase Amid Supply Glut Concerns
OPEC+ plans to increase oil output by 137,000 bpd in November, maintaining its October strategy amidst fears of a supply glut. This decision follows a year of significant output target hikes to recover market share from U.S. shale rivals. Divergent views within the group highlight tensions between Russia and Saudi Arabia.
OPEC+ announced a plan to raise oil output by 137,000 barrels per day starting November, sticking to its modest monthly increase amidst ongoing concerns over a potential supply glut. The alliance, which includes major players like Russia and Saudi Arabia, held firm in its strategy following a year of noticeable output hikes to reclaim market share from U.S. shale competitors.
Market analysts anticipate a supply surplus in the fourth quarter as Brent prices dipped below $65 per barrel. Despite differing perspectives within OPEC+, with Russia preferring a restrained output increase and Saudi Arabia advocating for a larger boost, the group aims to strike a balance between stabilizing the market and capturing greater market share.
The decision underscores internal disagreements, primarily due to global dynamics and geopolitical tensions, as seen with Russia's sanctions-linked challenges. With a cautious approach, OPEC+ treads carefully, attempting to navigate market stability while addressing production cuts projected to unwind by September's end. Analysts speculate oil prices might see a slight uptick with this controlled output escalation.
(With inputs from agencies.)
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