There is a divergence among oil traders on whether OPEC+ will resume production as planned in December, as crude oil prices continue to decline amid fragile economic prospects.

Led by Saudi Arabia and Russia, this alliance plans to increase production monthly starting from December, with each increase of 0.18 million barrels per day, gradually restoring supplies that have been paused since 2022.

However, due to weak oil demand and the increase in competitors' production, producers have postponed the restart plan initially scheduled to begin in October. With no clear signs of demand improvement, traders and analysts surveyed by foreign media are not optimistic about whether the alliance is ready to act now.

Among the 30 respondents surveyed, 16 predict that OPEC+ will choose to postpone production increases. The organization needs to make a decision in the coming weeks in order to inform customers in a timely manner.

Meanwhile, since early July, oil prices have dropped by 18%, to around $72 per barrel. For many OPEC+ members like Saudi Arabia, this price is too low to cover government spending.

Energy and Climate Director at consulting firm Chang Chun Eurasia Group Henning Gloystein said: "The biggest problem facing oil demand is Asia, which is putting OPEC+ in a difficult situation."

The International Energy Agency (IEA) estimates that oil demand in Asian countries has shrunk for four consecutive months, leading to the global oil demand growth rate dropping to the lowest level since the outbreak of the epidemic in 2020. IEA predicts that next year, an increase in demand of about 1 million barrels per day (about 1%) will be offset by a surge of 1.5 million barrels in supply, putting the world market into a new oversupply situation.

Low oil prices pose a threat.

Citigroup and JPMorgan expect oil prices to fall to the $60 range next year. If OPEC+ opens the oil valve, prices may even go lower.

According to the International Monetary Fund (IMF), this poses a financial threat to Saudi Arabia, which needs oil prices close to $100 per barrel to fund Crown Prince Mohammed bin Salman's grand economic plans.

Saudi Energy Minister Prince Abdulaziz bin Salman often urges the organization to be cautious about increasing output to the market. Last month, when OPEC+ discussed restarting supply, traders' expectations also differed.

ABN AMRO's head of commodity strategy Ole Sloth Hansen said, "Market sentiment is weak, and further production increases by OPEC+ could be further affected."

However, the other 14 respondents expect OPEC+ to continue with the December production increase plan. They believe that global oil inventories have been depleted, driven by summer driving demand in the USA and other regions. An official, who preferred to remain anonymous, said that OPEC+ cannot indefinitely postpone its production recovery roadmap.

Chief energy strategist Jeff Currie of The Carlyle Group's path division stated, "Specifically, the market is not very tight, but it is comfortable, giving OPEC+ room to ramp up production based on data."

Impact Wave of the US Presidential Election.

Currie added that the organization's market outlook ultimately depends on the outcome of the U.S. presidential election on November 5th.

He said: "The real geopolitical risk has not yet arrived, that is the impact of the U.S. election tsunami. This will touch the most fragile points around the world."

According to reports, as a key member of the organization, the UAE has been eager to utilize its new production capacity, which is reportedly much higher than the current production level. Abu Dhabi has obtained a special arrangement to increase some production regardless of whether the group is fully ramping up production.

OPEC+ has agreed to gradually restore a total of 2.2 million barrels/day of production cuts by the end of 2025 in monthly increments. Ministers will hold a meeting on December 1st to discuss next year's production increase plans.

Their policies may depend on the least disciplined members in the alliance: Iraq and Kazakhstan.

The OPEC leadership has put pressure on these two countries because they have failed to meet their promised production cut quotas at the beginning of the year. Although they have shown some recent improvement and pledged to increase cuts to offset overproduction, they are still producing above their allotted quotas.

According to Royal Bank of Canada Capital Markets Limited, Riyadh may be very frustrated with extending the cuts and may choose to accelerate the timeline for increasing supplies. However, some doubt that the organization may wait for lagging countries to fulfill their cut commitments. Aldo Spanjer, a commodity strategist at BNP Paribas, said:

"I expect the market to want to see evidence that some OPEC member countries have implemented compensatory cuts before partially resuming supplies. Increasing production before signs of compensatory cuts appear could trigger another round of selling. Therefore, I expect OPEC+ to continue to postpone production increases in December."