OPEC+ Meeting Approaches, Organization May Raise Oil Production Again in November

Oil traders anticipate that OPEC+ is likely to approve another increase in crude oil production at next week's meeting, as rising oil prices prompt the organization to further reclaim market share.

According to Caixin, eight members of OPEC+ will hold an online meeting on October 5 to decide on production levels for November. Currently, OPEC+ accounts for about half of the world's oil production, and its members include the Organization of the Petroleum Exporting Countries (OPEC) as well as Russia and other allies.

Three people familiar with the negotiations revealed that OPEC+ might decide to increase oil production by at least 137,000 barrels per day at the October meeting.

Oil Price Trends

Since April, OPEC+ has changed its production reduction strategy and has increased its output quotas by more than 2.5 million barrels per day, accounting for about 2.4% of global demand. This move aims to increase market share and also responds to the pressure from U.S. President Trump to lower oil prices.

At the beginning of the year, oil prices exceeded $80 per barrel, but since OPEC began increasing production in April, prices have mostly fluctuated within a narrow range of $60 to $70 per barrel.

Last Friday (September 26), oil prices rose to their highest level since August 1, exceeding $70 per barrel. This surge was partly due to Ukraine's drone attack on Russian energy infrastructure, which disrupted the refining operations and oil transportation of Russia, one of the world's largest oil exporters.

Further production increase is subject to discussion.

Since the end of 2022, OPEC+ has initiated a series of production cut strategies. Previously, the organization's total production cut reached a peak of 5.85 million barrels per day, comprised of three different parts—a voluntary cut of 2.2 million barrels per day, a reduction of 1.65 million barrels per day by eight member countries, and a cut of 2 million barrels per day by the entire organization.

Now, after the reversal of the production cut strategy, these eight oil-producing countries plan to completely cancel one of the production reduction measures, specifically the cut of 2.2 million barrels per day, by the end of September.

Starting in October, they also plan to begin reducing the second layer of production cuts, involving 1.65 million barrels per day, while initially increasing production by 137,000 barrels per day that month.

Additionally, OPEC+ also approved an increase in the UAE's production by 300,000 barrels per day from April to September.

According to three informed sources, the proposed increase in production for November at the meeting on October 5 will be at least 137,000 barrels per day, the same as the increase in October, but a final decision has not yet been made.

The third phase of the production cut measures planned by OPEC+ member countries (involving 2 million barrels per day) is scheduled to continue until the end of 2026.