alarm! Oil production hit a new high since April last year, OPEC+ will consider releasing more crude oil to the market next week

A Reuters survey found that the Organization of the Petroleum Exporting Countries (OPEC) September oil production rose to the highest level since April 2020. After the problem that caused involuntary production cuts was resolved, Nigeria’s production recovered, and the major oil-producing countries An agreement reached by allies to further ease supply restrictions. According to sources, the Organization of Petroleum Exporting Countries and the oil-producing allies (OPEC+) will consider other options in addition to the existing agreement to increase production by 400,000 barrels a day when they meet next week to deal with oil prices approaching three-year highs and consumer country requirements. Increase supply pressure.

Taking into account that the oil distribution is still facing resistance from the 80-round mark, investors need to beware of the risk of short-term corrections in oil prices.

OPEC’s oil production in September hit a new high since April last year, with Nigeria’s largest increase

The survey found that OPEC's production in September was 27.31 million barrels per day, an increase of 420,000 barrels per day from the revised figure in August. With the exception of February this year, OPEC's production has been increasing every month since June 2020.

With the recovery in demand, the OPEC+ alliance formed by OPEC and its allies is relaxing the production reduction measures implemented in April 2020. However, due to insufficient production capacity in some member countries, the alliance has not reached the policy-allowed increase in production scale. This helped support oil prices. Brent crude oil is currently trading at around $80 per barrel, close to a three-year high.

OPEC data seen by Reuters shows that the OPEC+ agreement allows all member countries to increase their total output by 400,000 barrels per day in September, of which 253,000 barrels per day are allocated to 10 OPEC-producing countries subject to the agreement.

The survey found that although the increase in output of these 10 member states in September exceeded this quota, OPEC's overall monthly output increase did not exceed the quota. The oil production of OPEC member states is still below the level allowed by the latest agreement. The implementation rate of OPEC member states’ production reduction agreements was 114% in September and 115% in August.

The survey showed that the member country with the largest increase in output in September was Nigeria, which increased by 170,000 barrels per day. Some survey participants said that the actual increase in production in this country was even higher than this.

A company tracking OPEC’s supply said, “After the settlement of the Port of Ficardos and other issues in August, we expect the country’s production to increase by more than 200,000 barrels per day.”

Saudi Arabia is the second largest member country with the largest increase. According to the latest OPEC+ agreement in September, the country has further increased its supply. Iraq, Kuwait, the UAE, and Algeria saw smaller increases in production.

The investigation found that the output of Angola, Congo, Equatorial Guinea and Gabon has declined or has not increased, and the supply cannot be increased due to insufficient production capacity.

The Reuters survey is designed to track market supply and is based on shipping data provided by external sources, Refinitiv Eikon flow data, information from tanker tracking companies such as Petro-Logistics and Kpler, as well as information provided by oil companies, OPEC and consulting agencies.

OPEC+ will consider the option of releasing more crude oil to the market next week

The Organization of Petroleum Exporting Countries and the oil-producing allies (OPEC+) will hold a meeting next Monday (October 4) to review their policies. The market originally expected it to maintain a plan to increase production by 400,000 barrels per day.

But on Thursday (September 30), a source said that the Organization of Petroleum Exporting Countries and the oil-producing allies (OPEC+) will consider other options besides the existing agreement to increase production by 400,000 barrels a day when they meet next week. Oil prices are nearing a three-year high and pressure from consumer countries to increase supply.

In July, the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing countries led by Russia agreed to increase daily production by 400,000 barrels per month and gradually withdraw from plans to reduce daily production by 5.8 million barrels. OPEC+ will hold a meeting on Monday to review its output policy.

Four OPEC+ sources said that it is possible to further increase oil production, but no one gave a specific amount or specific month. Another OPEC+ source said that there may be an increase of 800,000 barrels per day in the next month, and there may be no increase in production in the next month.

Since the OPEC+ last meeting decided on the October output, the fastest month to increase production is November.

"We cannot rule out any options," said an OPEC+ source. Another source said that the oil market may need more oil than the existing agreement, which is "one of the possible scenarios."

The source said on Wednesday (September 29) that the most likely outcome is that the organization will stick to its existing plans.

It is still unclear what caused this change in tone, but before that, the OPEC+ Joint Technical Committee (JTC) held a meeting to assess the market prospects, and it is expected that under its basic scenario forecast, the oil market will appear 140 next year. The surplus of 10,000 barrels per day is slightly lower than the previously predicted surplus of 1.6 million barrels per day.

JTC predicts that assuming a demand growth of about 6 million barrels per day, there will be a shortage of 1.1 million barrels per day in the oil market this year. The committee assumes that next year's demand growth will be 4.2 million barrels per day.

Prior to the OPEC+ online meeting on October 4, negotiations between member states continued, and there was no guarantee that they would agree to additional production increases.

Driven by a strong recovery in demand after the unexpected shutdown of the United States and the impact of the epidemic, Brent crude oil futures rose to a three-year high of around US$80 per barrel on Tuesday (September 28), and then fell into a high volatility trend. Friday (October 1) Japan) During the Asian session, Burundi Oil was trading at around US$78.20/barrel.



The White House, which expressed concern about high oil prices in August, said on Tuesday that it was communicating with OPEC to find a way to solve the problem of oil costs.

The energy ministers of OPEC member states of Iraq, Nigeria and the United Arab Emirates have stated in recent weeks that the organization does not see the need for special measures to change existing agreements.

U.S. National Security Adviser Sullivan planned to discuss high oil prices with Saudi Arabia

White House spokesman Psaki said on Thursday that US National Security Adviser Jake Sullivan had planned to discuss the issue of high oil prices during a meeting with Saudi Arabia’s Crown Prince Mohammed bin Salman earlier this week.

Psaki said, "Obviously, oil prices are worrying. We have been in contact with OPEC. I believe this issue would have been raised, but apart from that, I have no chance to get news.

Analysts from the Research Department of ANZ Bank stated in the report that “The OPEC+ meeting to be held next Monday (October 4) is critical to the direction of oil prices next week. If the increase in production exceeds 400,000 barrels per day, it will see the supply side. There is some short-term relief".

GMT+8 13:45, US crude oil is now quoted at $78.22 per barrel.