OPEC+ oil producers to increase production from October

A core group of OPEC+ oil cartel members on Sunday agreed to continue their expansion of production volumes from next month.

Saudi Arabia, Russia and six other countries decided to increase their daily production by a total of 137,000 barrels from October. The industry standard barrel contains 159 litres of oil.

This core group had already gradually turned on the oil taps in recent months in order to reverse past production restrictions totalling 2.2 million barrels per day (bpd).

With the further increase, the eight states are beginning the gradual reversal of another tranche of cuts of some 1.65 million bpd.

However, the group is slowing the pace somewhat: most recently, the production target for September was raised by 547,000 bpd – significantly higher than the next planned increase of 137,000 bpd.

The eight countries justified their move with the “healthy” situation on the oil market, “stable global economic prospects” and low oil inventories.

In addition to Saudi Arabia and Russia, the group also includes Algeria, Iraq, Kazakhstan, Oman and the United Arab Emirates.

Oil prices fell following a disappointing US labour market report, which indicated subdued demand from the world’s largest economy. The expected increase in production from the ranks of Opec+ also put pressure on prices.

Commodity analysts had warned in advance of a further increase in production. OPEC+ is already supplying significantly more oil than the market needs, according to experts at Germany’s Commerzbank.