By AHMAD GHADDAR, OLESYA ASTAKHOVA AND MAHA EL DAHAN
LONDON/MOSCOW/DUBAI — The world’s largest group of oil producers, OPEC+, is set to announce another big increase of 411,000 barrels per day in production for August as it looks to regain market share, four delegates from the group told Reuters.
If the increase is agreed, it would bring the total rise in supply from OPEC+ to 1.78 million bpd so far this year, equivalent to over 1.5 percent of total global demand. The group has not yet increased production by the volumes agreed because some members are compensating for previous overproduction and others need longer to bring output back online.
The group has made a radical change in policy this year, after several years of output cuts totalling more than 5 million bpd. This came when eight members started to unwind their most recent output cut of 2.2 million bpd starting in April and accelerated the production hikes in May, June and July, despite the extra supply weighing on crude prices.
The change came after some members, such as Kazakhstan, produced way over their targets, angering other members that were sticking more closely to agreed cuts. OPEC and its allies including Russia, together known as OPEC+, are also seeking to win back market share during the period of cuts when rival producers such as the United States boosted production.
Russian President Vladimir Putin said on Friday that OPEC+ projects rising global demand, especially in the summer, suggesting the group may continue with big output hikes.
The group of eight, which includes Saudi Arabia, Russia, Kuwait, Iraq, the United Arab Emirates, Kazakhstan, Oman and Algeria, will meet on July 6.
Analysts at Energy Aspects and Helima Croft at RBC Capital Markets expect an August hike of 411,000 bpd.
“We do think the group is most likely to still go ahead with the August accelerated unwinding,” said Richard Bronze, head of geopolitics at Energy Aspects.
OPEC and authorities in Saudi Arabia did not immediately respond to requests for comment.
