Oil prices are likely to take another hit this weekend as eight OPEC+ countries are expected to further raise oil output when they meet on Sunday.
The group’s leader Saudi Arabia is pushing for a large increase to regain market share, while Russia is suggesting a more modest rise, four people with knowledge of the OPEC+ talks said.
Russia and Saudi Arabia, the two biggest OPEC+ producers, have over the past years sometimes disagreed on the size of output rises but ultimately found a compromise.
Moscow would prefer the group to raise output by 137,000 barrels per day from November, the same as the increase in October, to avoid putting oil prices under pressure and because it would struggle to raise output due to sanctions, according to two of the sources.
Saudi Arabia, on the other hand, would prefer to see double, triple or even quadruple that figure – 274,000 bpd, 411,000 bpd or 548,000 bpd respectively, as it has the ability to ramp up production quickly and wants to grow market share, the sources said.
OPEC did not respond to a request for further comment, but said Tuesday that it has no plans to raise output by 500,000 bpd.
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Authorities in Saudi Arabia and Russia did not immediately respond to a request for comment either.
OPEC+ has reversed its strategy of output cuts from April to boost market share and in response to pressure from U.S. President Donald Trump desire for lower oil prices.
File photo of an Aramaco refinery located at Ras Tannura, Saudi Arabia. The leader of the OPEC+ group of countries wants to significantly increase oil production, in response to U.S. President Donald Trump’s demands for lower oil prices.
(AP Photo/FILE)
At their peak, OPEC+’s total output reductions amounted to 5.85 million bpd, made up of three elements – voluntary cuts of 2.2 million bpd, 1.65 million bpd by eight members, and another
2.0 million bpd by the whole group.
The eight producers plan to fully unwind one element of those cuts – 2.2 million bpd – by the end of September.
For October, they started removing the second layer of 1.65 million bpd with the increase of 137,000 bpd.
Goldman Sachs on Tuesday said that it expected the group to raise its quotas by 140,000 bpd.
Oil prices were on course Friday for a weekly loss of over 7 per cent on the prospect of a further OPEC+ supply hike, with Brent crude trading above $64 (U.S.) per barrel, West Texas Intermediate at just over $61. and Western Canada Select selling for just over $48. per barrel.
