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OPEC+ Delays Planned Oil Output Increase Amid Falling Prices and Economic Concerns
OPEC+, the alliance of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, has agreed to delay a planned oil output increase for October and November 2024. This decision comes after crude prices fell to their lowest in nine months, with further pauses or even reversals in the production hike being considered if market conditions demand.
The delay in increasing output is a strategic response to falling oil prices, driven by concerns over a weak global economy and sluggish economic data from China, the world’s largest oil importer.
Oil Prices Hold Near Multi-Month Lows
As of Thursday, oil prices remained near a 14-month low. Brent futures were down 18 cents (0.3%) to $72.52 per barrel by 1739 GMT, while US West Texas Intermediate (WTI) crude fell 25 cents (0.4%) to $68.95 per barrel. These declines reflect broader market apprehension amid fears of a slowing global economy.
OPEC+ Meeting and Production Cuts
On Thursday, eight members of OPEC+, who were scheduled to raise output from October, held a virtual meeting to discuss market conditions. In a statement, OPEC said, “The eight participating countries have agreed to extend their additional voluntary production cuts of 2.2 million barrels per day (bpd) for two months until the end of November 2024.”
The news briefly lifted oil prices by over $1 per barrel, with Brent futures trading above $74 before paring gains. The price increase, however, remained fragile as it fell to its lowest this year on Wednesday.
Context of OPEC+ Production Adjustments
OPEC+’s initial plan for an October output hike was a modest 180,000 bpd, a fraction of the 5.86 million bpd currently withheld from the market—equivalent to about 5.7% of global demand. The group’s decision to delay the output increase aims to support the market amid uncertainties about global oil demand and rising supply from non-OPEC+ producers.
OPEC+ has shown its readiness to adjust its policies further if necessary to stabilize the market, reflecting its ongoing role in managing the global oil supply balance amid uncertain economic conditions.
