OPEC+ Discusses Further Delay to Oil Output Hike, Sources Say

• OPEC+ nations are discussing a further delay to a planned oil output hike that was due to start in January, two sources from the producer group said, ahead of Sunday's meeting to decide policy for the early months of 2025.

• The two OPEC+ sources were speaking after OPEC+ members Iraq, Saudi Arabia and Russia held talks in Baghdad, Iraq, on Tuesday, November 26, 2024. OPEC+ comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia.

• OPEC+, which pumps about half the world's oil, had planned to gradually roll back oil production cuts with small increases over many months in 2024 and 2025. However, a slowdown in Chinese and global demand, and rising output outside the group, have put a dampener on that plan.

• Notably, at its most recent meeting on November 3, 2024, OPEC+ agreed to delay a planned December output increase by a month until the end of December. The hike is due to be 180,000 barrels per day (bpd), a small part of the total 5.86 million bpd of output OPEC+ is holding back, equal to about 5.7% of global demand. OPEC+ agreed to those cuts in separate steps in 2022 to support the market.

• However, last week, OPEC+ sources said the output hike could be delayed until the first quarter. Analysts at Commerzbank expect it could be postponed until at least the end of the first quarter.

• Despite OPEC+'s cuts and delays to output hikes, oil prices have mostly stayed in a $70-$80 per barrel range this year and on Tuesday (November 26, 2024) were trading below $74 a barrel, not far above a 2024 low reached in September.

(Source: Reuters)