OPEC+ plans to increase production by 0.18 million barrels per day in December, which is part of the process of easing production cuts.
On Thursday, reports suggested that Saudi Arabia has pledged to increase production later this year, causing crude oil prices to fall over 3%.
Sources familiar with Saudi Arabia's thinking told the Financial Times of the United Kingdom that Saudi Arabia is prepared to abandon the unofficial oil price target of $100 per barrel. The sources said Saudi officials are ready to increase oil production in December, even if it means keeping oil prices low in the long term.
Furthermore, two sources within OPEC+ stated that OPEC+ will continue with its planned oil production increase in December, as the impact of the production increase would be minimal if some member countries implement larger-scale cuts in September and the following months to offset excess production.
OPEC+ plans to raise daily production by 0.18 million barrels in December as part of the process to ease production cuts. Additionally, Iraq and Kazakhstan have committed to further cut 0.123 million barrels per day in September and undertake additional cuts over the coming months to compensate for previous production levels exceeding agreed amounts.
A source mentioned that as compensation plans for production cuts by these countries and September production data become clearer, production increases will be allowed, as the impact of the increases can be negligible.
OPEC and Saudi Arabia have repeatedly stated that they do not target specific prices but make decisions based on market fundamentals and the interests of supply-demand balance.
An OPEC+ insider said that the December production increase is not to regain market share, but to gradually phase out voluntary production cuts in a few countries.
OPEC+ senior ministers are scheduled to meet on October 2 to review the market, with no change in policy expected. Another OPEC+ source said that ministers may hold another meeting in November.
Russian Deputy Prime Minister Novak told Reuters on Thursday that OPEC+ has not changed its plan to gradually ease oil production cuts starting December.
Due to the expected increase in Libya's oil production, crude oil prices are also under pressure. Various factions in this North African country reached an agreement on Wednesday and appointed a new central bank governor. Political disputes over who should lead the bank have led to production disruptions.