Oil: Opec+ increases production by 137,000 barrels since November

Saudi Arabia, Russia and six other Opec+ members decided on Sunday to increase their production quotas by 137 thousand barrels per day in November, continuing to push for more market share. "Given the stable global economic outlook and current solid market fundamentals, as reflected in low oil stocks, the eight participating countries have decided to implement a production adjustment of 137 thousand barrels per day" from October levels, the group said in a note after an online meeting. The increase fell short of many analysts' expectations, with the cartel trying to avoid putting pressure on prices due to weak demand.

Opec+ acted cautiously after realising how nervous the market had become in light of rumours that production could be increased by 500,000 barrels a day," said Jorge Leon, an analyst at Rystad Energy, as reported by Afp. "The group is walking a tightrope between maintaining stability and regaining market share in a surplus environment," he added. In recent months, Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Oman and Algeria have already increased their shares by more than 2.5 million barrels per day.

Opec+'s priority at the beginning of the year was to keep prices high by limiting supply, but it has changed its strategy since April and is now trying to gain market share from other producers such as the United States, Brazil, Canada, Guyana and Argentina. The production increases," writes Afp, "come as the International Energy Agency predicts that oil demand will only increase by 700,000 barrels per day between 2025 and 2026. For Opec, which is generally more optimistic in its reports, global oil demand will increase by 1.3 million barrels per day in 2025 and another 1.4 million in 2026.

Russia, the largest producer in the cartel after Saudi Arabia, depends on high prices to finance its war machine against Ukraine, but unlike Riyadh, it has limited potential to increase production due to US and European pressure on its oil sector, the Afp analysis said. The increase decided on Sunday is 'manageable' for Russia, Leon said. Russia currently produces about 9.25 million barrels per day and has a maximum production capacity of 9.45 million, up from about 10 million before the war, Kpler analyst Homayoun Falakshahi told Afp. Ukrainian attacks on Russian refineries have intensified since August, causing "an increase in Russian crude oil exports as it cannot be used domestically", making the country even more dependent on selling oil abroad, Arne Lohmann Rasmussen, an analyst at Global Risk Management, told Afp.