Insiders: OPEC+ to Proceed with October Output Expansion

Six sources close to OPEC+ told Reuters that the producer group will move forward with its October oil output increase as a result of Libyan disruptions and cuts made by other members to offset overproduction.

As part of a pact to start unwinding its most recent layer of output curbs of 2.2 million bpd while leaving other cuts in place until end-2025, eight OPEC+ countries are planned to increase output by 180,000 barrels per day in October.

A deceleration in the expansion of demand, particularly in China, has exerted pressure on oil prices and led some analysts to question whether OPEC+—the Organization of the Petroleum Exporting Countries and its allies—will proceed with the October increase.

However, as the market becomes more tight due to the loss of Libyan output and expectations that the US Federal Reserve would lower interest rates in mid-September grow, the six OPEC+ sources told Reuters that the plan to boost production is still in place.

“There are many uncertainties on demand but there is also the hope that the Fed’s interest rate cut will boost economic growth,” according to a source.

According to Prince Abdulaziz bin Salman, Saudi Arabia’s energy minister, OPEC+ may opt to stop or reverse the production increases if it determines the market is not robust enough.

Until the Joint Ministerial Monitoring Committee meeting on October 2, which is attended by top ministers, OPEC+ does not have any official meetings scheduled. Recommendations to the larger OPEC+ group can be made by the JMMC.

Requests for comment from OPEC, the Saudi government’s press office, and the Russian Deputy Prime Minister Alexander Novak’s office were not immediately answered.