OPEC might increase oil production a bit this November
What's the story
The Organization of the Petroleum Exporting Countries (OPEC) is close to a deal for a minor increase in oil production for November. Delegates from key member countries said they are likely to approve an increase of 137,000 barrels per day (bpd), the same as this month. The decision comes amid efforts by the group to reclaim its share in global oil markets.
Market response
Oil prices near 4-month low
Oil prices are hovering near a four-month low, which highlights the delicate balancing act for OPEC and its allies as they look to reintroduce supply into an oversaturated market. The group is bringing back another layer of halted production, totaling around 1.65 million bpd. This comes after a larger tranche was recently restored despite strong market resilience to added supply so far.
Market trends
IEA warns of record surplus in 2026
There are indications that the oil market is changing, with unsold Middle Eastern cargoes piling up and futures forward curve indicating near-term weakness. The International Energy Agency (IEA) expects inventories to build quickly this quarter, leading to a record surplus in 2026 as global demand slows and supply from the Americas surges.
Strategy differences
Divergence in views from group co-leaders Saudi Arabia, Russia
OPEC members are debating whether to stick with the gradual pace set last month or ramp up production increases. There is a divergence in views from group co-leaders Saudi Arabia and Russia. Saudi Arabia, which has taken the biggest hit from the production cuts now being reversed, is leading the push for increased output to reclaim market share.
Capacity constraints
Limits of spare capacity within the OPEC alliance
The series of production hikes has also highlighted the limits of spare capacity within the OPEC alliance. Eight key members have restored only about 60% of a planned 2.2 million bpd supply tranche between May and September. This is partly due to some countries compensating for previous overproduction but also indicates that certain members may already be operating at near-full capacity.