OPEC+ to Proceed with December Oil Output Increase, Sources Indicate – Reuters

By Maha El Dahan, Olesya Astakhova, and Alex Lawler

DUBAI/LONDON (Reuters) – OPEC+ is set to proceed with an oil output increase in December, with expectations that its impact will be minimal due to plans for some members to implement larger cuts to offset overproduction in September and subsequent months, according to two OPEC+ sources.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, are scheduled to increase output by 180,000 barrels per day in December, marking a step towards unwinding their most recent set of production cuts.

Iraq and Kazakhstan, two OPEC+ members, have committed to making additional cuts totaling 123,000 barrels per day in September, along with further reductions in future months to address earlier production that exceeded agreed-upon levels.

"When the compensation plan and production figures from those countries become clear for September, it will allow the increase to take place since its effect will be negligible," stated one of the OPEC+ sources, referring to the December rise.

The Saudi government’s communications office, along with OPEC’s headquarters, did not respond immediately to requests for comments.

Earlier on Thursday, the Financial Times reported, citing sources familiar with Saudi Arabia’s perspective, that the kingdom is dedicated to the OPEC+ plan to raise production as scheduled on December 1 and moving away from an unofficial $100 per barrel oil price target.

OPEC and Saudi Arabia have consistently asserted that they do not target specific prices, instead making decisions based on market fundamentals to balance supply and demand.

The planned output increase in December is not aimed at regaining market share but is primarily about a few countries beginning to phase out their voluntary output cuts, according to one OPEC+ source.

Top ministers from OPEC+ are expected to convene on October 2 to assess the market, with no significant policy changes anticipated.

Additionally, Russian Deputy Prime Minister Alexander Novak reaffirmed on Thursday that there are no alterations to OPEC+ plans to start relaxing oil production cuts beginning in December.

A third source from OPEC+ indicated that the ministers might meet again in November.