According to Nam News Network, the wider OPEC+ group, comprising the 12-nation Organization of the Petroleum Exporting Countries (OPEC) and its allies, had agreed in recent years to several output cuts that amounted to almost six million barrels per day (bpd) in total. Jorge Leon, an analyst at Rystad Energy, commented on the expected fall in oil demand in the fourth quarter, noting the usual seasonal decline during the northern hemisphere's winter months. Even without a production boost, excess supply could lead to lower prices.
Market chatter since Wednesday suggested the group might consider another quota adjustment for October, according to Ole Hansen, an analyst at Saxo Bank. This potential decision reflects the group's intent to regain market share, even if it results in prices dropping below $60 a barrel, noted Leon. OPEC's analysis indicates potential for additional oil in the market in upcoming quarters, a point highlighted by Arne Lohmann Rasmussen, an analyst at Global Risk Management.
The cartel's consideration of reintroducing a second layer of voluntary production cuts, amounting to 1.66 million bpd agreed in spring 2023, might be influenced by these analyses. Despite the production increases, crude prices have remained stronger than most analysts predicted, bolstered by geopolitical risks.
Oil specialists are closely monitoring Moscow's war in Ukraine and developments in US-Russia relations. US President Donald Trump has recently targeted Russian oil and its buyers, imposing higher tariffs on India for its Russian oil purchases. In a recent meeting with Ukraine allies, Trump expressed frustration with EU purchases of Russian oil, specifically by Hungary and Slovakia, urging Europe to cease buying Russian oil. He also called for economic pressure on China, the largest importer of Russian oil, for its support of Russia's war effort. Reducing Russian exports could create market opportunities for OPEC+ nations.