OPEC and its allies including Russia (OPEC+), agreed to produce an additional 100,000 b/d for September, a small increase amid high oil prices and inflation and growing fears of a global recession. The increase would be one of the smallest since OPEC introduced quotas in 1982, OPEC data shows. The increase is so little as to be meaningless, said many analysts.
The OPEC+ group faces pressure to boost supply and lower oil prices after US President Biden’s trip to Saudi Arabia to persuade OPEC’s leader to pump more.
OPEC+ has been increasing production by about 430,000-650,000 b/d a month as they lift record supply cuts introduced when pandemic lockdowns stifled demand. They had, however, struggled to meet full targets as most members encounter production capacity constraints and ongoing technical and operational issue following years of underinvestment.
Ahead of the meeting, OPEC+ trimmed its forecast for the oil market surplus this year by 200,000 b/d to 800,000 b/d.
