OPEC+ is considering a production boost by more than the 400,000 bpd monthly the extended oil cartel agreed to earlier this year, Reuters has reported, citing unnamed sources in the know.
OPEC+ has been under growing pressure to boost production more generously as Brent moved closer to $80 a barrel and even briefly topped this level last month.
According to the report, most sources were reluctant to go into detail about the possible size of a greater production increase, but one suggested it is possible to boost production by 800,000 bpd for one month and then add no further barrels the next month.
In September, the cartel boosted its combined production by more than 400,000 bpd, adding 20,000 bpd to the agreed amount as Nigeria’s production rebounded more strongly than expected, by 170,000 bpd.
Meanwhile, this week the White House said it was in contact with OPEC on the issue of prices. National security adviser Jake Sullivan has, according to the White House, discussed oil prices with the Saudi Crown Prince, Mohammed bin Salman, earlier this week during a visit to the Kingdom.
“We cannot exclude any option,” one of the Reuters sources said, while another noted that OPEC had considered a scenario where demand rebounded more strongly than supply. These sources’ comments come on the heels of other anonymous remarks that said OPEC+ was most likely to stick to its original agreement.
Naturally, the Reuters report immediately moved prices in Asian trading today, with both Brent and West Texas Intermediate down slightly at the time of writing.
“The upcoming OPEC+ meeting on Monday will be crucial for oil price direction next week. A production increase beyond 400,000 bpd would see some short-term relief,” ANZ said in a note earlier today, as quoted by Reuters.
Demand is meanwhile seen to continue growing strongly, not least because record natural gas prices are forcing power utilities to switch to fuel oil and diesel, which will add further upward pressure to oil prices.
By Irina Slav for Oilprice.com
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