OPEC+ eyes a modest hike in oil output targets
What's the story
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are likely to agree on a modest increase in oil output targets during their upcoming meeting. The decision comes as the group moderates its plans to regain market share amid fears of an impending supply glut.
Production boost
OPEC+ output increases slowed in October
Since April, OPEC+ has raised its oil output targets by over 2.7 million barrels per day (bpd), which is about 2.5% of the global supply. However, the pace of these increases was slowed in October amid fears of a potential oversupply. The new Western sanctions on Russia, a key member of OPEC+, have further complicated these discussions as Moscow may find it hard to increase production further.
Target agreement
Output increase could range from 100,000-150,000 bpd
According to Reuters, eight OPEC+ members, Saudi Arabia, Russia, the United Arab Emirates (UAE), Iraq, Kuwait, Oman, Kazakhstan and Algeria, are likely to agree on a hike in December's output targets by 137,000 bpd. However, a pause in these output hikes is also possible. The decision will be finalized during today's meeting.
Price volatility
Oil prices hit 5-month low on oversupply fears
On October 20, oil prices hit a five-month low of about $60 per barrel due to fears of an oversupply. However, they have since recovered to around $65 per barrel due to Russian sanctions and optimism over US trade talks. Analysts from RBC, Rystad, Commerzbank and SEB have this week predicted that OPEC+ will raise the targets by 137,000 bpd for December.