Opec+ is considering postponing a scheduled increase in oil production next month as oil prices reach their lowest point in nine months, according to three sources from the producer group who spoke to Reuters on Wednesday.
Oil prices have declined alongside other assets due to concerns over a weak global economy, particularly due to soft economic data from China, the world's largest oil importer. Last week, the group appeared poised to implement an increase of 180,000 barrels per day (bpd) in October, but market volatility caused by shutdowns in Libyan oil facilities and a weak demand outlook have sparked concerns within the group, one source noted.
There have been proposals to postpone the increase, with one source suggesting a delay is highly likely. The Organization of the Petroleum Exporting Countries and the Saudi government communications office have not yet responded to requests for comment.
Eight members of Opec+, including its allies, are set to boost output by 180,000 bpd in October as part of a plan to unwind their recent output cuts of 2.2 million bpd while maintaining other cuts until the end of next year. Brent crude was up 1 percent at $74.47 a barrel at 1104 GMT on Wednesday, buoyed by the potential delay, but still at its lowest level since December.
Prices have been highly volatile in recent weeks due to a standoff between rival factions in Opec producer Libya over control of the central bank, resulting in a loss of at least 700,000 bpd of production. Prices fell about 5 percent on Tuesday following news of a potential deal to resolve the conflict. Weak Chinese demand and a slump in global refining margins, which could lead to less crude being processed by refiners, have also impacted prices.
"While the APAC region was expected to drive most of the growth this year, China's underperformance has negatively affected 2024 growth projections and continues to lag behind both 2023 crude import and refinery throughput levels," said RBC Capital analyst Helima Croft in a note.
