An oil drum with featuring the logo of the Organization of the Petroleum Exporting Countries (OPEC) at the COP29 climate conference in Baku, Azerbaijan, on Wednesday, Nov. 13, 2024.
Andrey Rudakov | Bloomberg | Getty Images
OPEC+ oil-producing countries met on Saturday to discuss July output with four sources telling Reuters while the meeting was under way that the group was set to agree to an increase of 411,000 barrels per day (bpd), in line with rises set for May and June.
The eight OPEC+ members, who began an online meeting shortly after 0900 GMT, were also discussing other options, an OPEC+ delegate said. On Thursday, sources familiar with OPEC+ talks said they could discuss an increase larger than 411,000 bpd for July.
The eight have been raising output more rapidly than earlier planned, even though the extra supply has weighed on prices. The strategy of group leaders Saudi Arabia and Russia is aimed partly at punishing over-producing allies and to win back market share, Reuters has reported.
All sources declined to be identified by name due to the sensitivity of the matter. OPEC and authorities in Russia and Saudi Arabia did not respond to requests for comment sent on Friday.
Kazakhstan’s statement on Thursday that it won’t cut production has sparked debate in OPEC+, some of the sources said on Friday, with one saying that this factor may tilt discussions towards a larger output hike on Saturday.
While eight leading OPEC+ members are increasing supply, some of those are being asked to temper those increases to compensate for producing more than their monthly quotas. Kazakhstan’s statement suggested it may not do so.
“Kazakhstan’s repeated public displays of production defiance do raise the risk of an even bigger output increase,” said Helima Croft of RBC Capital Markets, adding that she still saw a 411,000 bpd hike for July as likely.
Kazakhstan has been pumping far above its OPEC+ target, a factor that has angered other OPEC+ members and helped prompt the group to proceed with plans to hike output beginning in April, sources said at the time.
United Arab Emirates Energy Minister Suhail Mohamed Al Mazrouei, asked on Tuesday about the output plan for July, said OPEC+ was doing its best to balance the oil market.
Oil prices fell to a four-year low in April, slipping below $60 per barrel after OPEC+ said it was tripling its output hike in May and as U.S. President Donald Trump’s tariffs raised concerns about global economic weakness. Prices closed just below $63 on Friday.
OPEC+ includes OPEC members and allies such as Russia. Output increases that began in April are aimed at unwinding some 2.2 million bpd of voluntary output cuts by eight leading member states.