OPEC+ agrees to increase oil production, prices fall sharply
OPEC and its allies (OPEC+) are taking it slow on oil production, announcing just a small boost of 137,000 barrels per day for November—the smallest of the options the group discussed.
They're worried that with more oil coming from outside OPEC and global demand cooling off, the world could end up with way more oil than it needs.
Brent crude prices slid 8%
Right after the news, Brent crude prices slid 8%, dropping below $65 a barrel—one of the lowest points so far in 2024.
The shrinking gap between current and future prices, a sign of possible oversupply, hints at weaker short-term demand.
Even with these changes, OPEC+ has only managed about three-quarters of its planned output hike this year (2024).
Global stockpiles are growing
Analysts say we might see a glut soon as countries like the US, Brazil, and Guyana pump out more oil while seasonal demand fades.
The International Energy Agency thinks there could be an extra 3.3 million barrels per day sloshing around by 2026.
Plus, Russia and Middle Eastern producers ramped up exports last month—so global stockpiles are growing even with all the ongoing geopolitical drama.