The eight OPEC+ countries with voluntary production cuts decided on Sunday, as expected, increase the volume of production agreed in September in 547,000 barrels per day, says Commerzbank raw material analyst Carsten Fritsch.
Increasing production at the expense of Russia can endanger OPEC+
“As in previous months, the press release referred to a stable economic perspective, healthy foundations and low inventories. With the last increase in production, voluntary production cuts of the second half of 2023 and early 2024, which amount to 2.2 million barrels per day OPEC+ increase even more after September. “
“The remaining production restrictions, which total 3.66 million barrels per day, will be maintained until the end of 2026, according to an OPEC+decision. This also applies to volunteer production cuts of 1.66 million barrels per day that have been in force since May 2023 for the same eight countries. However, these could also be reversed before, according to OPEC delegates, depending on the conditions of the OPEC. Sources indicate that this could be discussed at the next virtual meeting of the eight countries on September 7.
“In view of the considerable excess supply that is coming in autumn, it is not advisable that OPEC+ increases even more production in the fourth quarter. However, this could change if secondary tariff From Russia to China and India and will be replaced by other suppliers, the excess of supply, according to the forecasts of the IEA, would be absorbed.
Source: Fx Street
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