OPEC+ will increase oil output production more than expected: +548,000 (+411,000 expected)

OPEC+ will raise oil production by 548,000 barrels per day in August. This is faster than expected.

• OPEC+ had previously announced increases of 411,000 barrels per day for each month of May, June and July, and this was the increase expected to be announced at Saturday’s meeting.

OPEC+ cited:

• steady global economic outlook
• current healthy market fundamentals, as reflected in the low oil inventories

Oil media reports cite unnamed members of the cartel as saying the group will consider the boosted 548,000 barrels a day for September output once again at the next meeting, scheduled for August 3.

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The increase in output marks a significant shift from years of supply restraint. The jump in production aligns with a perceived shift in strategy from OPEC+ to market share (US shale drillers took some volumes away from OPEC+ members previously) over price defence.

The background to this is that back in 2023 the group announced 2.2 million bpd in cuts. The 411K boosts to output are unwinding these cuts, the 548K announced Saturday accelerates the unwind.

Notes:

• there is still a further 1.66 million bpd of idle capacity
• despite the official increase, actual output may fall short

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