Key OPEC+ nations are discussing delaying the planned oil production restart in January, possibly for several months, according to delegates.
Key OPEC+ nations are uncertain about proceeding with the 180,000 barrel-a-day increase scheduled for January, and may delay additional hikes planned for subsequent months due to concerns over a global oil oversupply, according to anonymous delegates.
As a result, oil futures rose by up to 1.9%, briefly exceeding $74 a barrel in London, according to Bloomberg.
On Tuesday, Saudi Energy Minister, Prince Abdulaziz bin Salman met with Russian Deputy Prime Minister, Alexander Novak and Iraqi Prime Minister, Mohammed Shia Al-Sudani in Baghdad to discuss oil market stability, according to a statement from the Iraqi prime minister’s office. OPEC+ is scheduled to meet online on December 1.
Eight OPEC+ nations are set to revive 2.2 million barrels per day in monthly increments starting in January, a plan delayed from October due to struggling oil prices. The group has been withholding output since late 2022 to support price stability.
The International Energy Agency forecasts a global oil glut next year, even if OPEC+ cancels its planned supply hikes.
Citigroup Inc. and JPMorgan Chase & Co. warn that prices, currently above $70 a barrel, are likely to fall to $60 or lower if OPEC+ increases output.
Traders widely expect the production increase to be delayed, possibly until the second quarter, according to a Bloomberg survey.
RBC Capital Markets LLC noted that the delay could extend until late in the second quarter.
Following the Baghdad meeting, Iraq reaffirmed its “seriousness and determination to fully comply with the agreement,” according to a statement from the Saudi Press Agency.
