OPEC+ discussing delay to planned oil output hike in October, sources say
September 4, 2024
OPEC+ is discussing a delay in a planned output increase next month as oil prices hit their lowest in 9 months, three sources from the producer group told Reuters on Wednesday.
Oil prices have been falling together with other asset classes on concerns about a weak global economy and particularly soft data from China, the world’s biggest oil importer.
Last week, the group looked set to proceed with a 180,000 barrel per day (bpd) hike in October, but market volatility from oil facility shutdowns in Libya and a weak demand outlook have raised concern within the group, one of the sources said.
There were suggestions to delay the increase, one of the sources said. Another said a delay was looking highly possible.
Eight members of the OPEC+ – which includes its allies – are scheduled to raise output by 180,000 bpd in October as part of a plan to begin unwinding their most recent layer of output cuts of 2.2 million bpd while keeping other cuts in place until the end of next year.
Brent crude traded 1% higher at $74.47 a barrel at 1104 GMT on Wednesday, rising on the news of the potential delay, but remained at its lowest since December.
Prices have experienced high volatility in recent weeks as a standoff between rival factions in OPEC producer Libya over control of the central bank led to a loss of at least 700,000 bpd of production.
Prices slumped by about 5% on Tuesday on news that a possible deal to resolve the conflict was in the works.
Weak Chinese demand and a slump in global refining margins which could translate into refiners processing less crude, have also weighed.
“While the APAC region was supposed to carry a majority of the growth this year, China’s underperformance has dented 2024 growth projections and has continued to trail both 2023 crude import and refinery throughput levels,” RBC Capital analyst Helima Croft said in a note.
REUTERS