OPEC+ Accelerates Oil Production Hikes Despite ‘Glut’ Concerns

OPEC+ agreed to accelerate the return of another chunk of oil that it’s been withholding from the market, as the group sticks with a strategy of prioritizing market share over prices.

After an online meeting Sunday, eight OPEC+ members said they will boost production by 137,000 barrels a day in October, beginning to roll back some voluntary cuts they had previously put in place.

The alliance, which comprises OPEC and other top oil producers including Russia, had been expected to keep output steady until recent days. 

It’s the first sliver of a bigger 1.65 million barrels a day tranche of supply that was meant to be held back until the end of next year, suggesting cautious optimism about the market.

OPEC+ members said Sunday the barrels may be restored in part or in full “subject to evolving market conditions.”

While the production increases have prevented prices from rising sharply amid heightened geopolitical tensions, The Wall Street Journal reports they have sparked fears of an impending glut among investors. 

This has yet to show in inventory data, largely because of robust summer demand and only modest stock buildups in OECD countries, according to market watchers. 

Actual OPEC+ production also has fallen short of pledged volumes in recent months, as some members had to restrict output to compensate for earlier overproduction.

The decision is likely to put a renewed spotlight on the unused production levels available in different OPEC+ members, as countries that can’t pump more won’t fully benefit from the increased quotas, while they face the added pressure of lower prices. 

The group’s next meeting will be October 5.