
The price of crude oil dropped slightly following reports that the OPEC+ group is likely to go ahead with unwinding some of the production cuts it has made to stabilise the market.
In October, eight members of the OPEC+ group are poised to increase their production of crude oil by a total of 180,000 barrels per day (bpd). At its last meeting, the group decided to make plans to start reversing voluntary cuts by some members amounting to 2.2 million bpd, although it said this was contingent on it not unbalancing the market.
With demand in China not recovering as quickly as expected, the plan had been put in doubt. Oil production from outside OPEC+ has been growing as well, such as in the United States and Guyana, where ExxonMobil, the maker of the Mobil grease and lubricant range, has been bringing a string of offshore projects online.
Reuters reports six sources from OPEC+ as saying that the group sees potential space in the market to increase production. Libya, for example, has seen production drop by 700,000 bpd after oilfields were shut down by the country’s eastern government. There are also compensatory cuts due from Russia, Kazakhstan and Iraq.
One of Reuter’s sources said:
“There are many uncertainties on demand, but there is also the hope that the interest rate cut will boost economic growth.”
Reuters reports two of the sources as saying that future increases in production could be decided on a monthly basis.