An installation depicting barrel of oil with the logo of Organization of the Petroleum Exporting Countries (OPEC) is seen during the COP29 United Nations climate change conference in Baku, Azerbaijan November 19, 2024. REUTERS/Maxim Shemetov/File Photo
OPEC+ is likely to agree to a further accelerated oil output hike for July this week, three delegates from the group told Reuters, in the latest stage of a plan to meet rising demand and increase market share.
When the 22-member group meets on Wednesday to review the market, it is not expected to change policy, the sources said.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has agreed three layers of output cuts since 2022 to support the market, two of which are in place until the end of next year.
Eight members began unwinding the most recent layer in April, and for May and June made larger-than-expected hikes of 411,000 barrels per day.
Three OPEC+ sources told Reuters the eight members at their meeting on Saturday may decide on a similar 411,000 bpd output hike for July. All sources declined to be identified by name due to the sensitivity of the matter.
"We assign a high probability to another sizeable output increase of 411,000 bpd," SEB analyst Ole Hvalbye said. "However, this potential hike seems largely priced in already," he added.
United Arab Emirates Energy Minister Suhail Mohamed Al Mazrouei, asked about the plan for July output on Tuesday, said OPEC+ was doing its best to balance the oil market and needed to be mindful of rising demand.
Oil fell to a four-year low in April below $60 per barrel after OPEC+ said it was accelerating its output hike in May and as U.S. President Donald Trump's tariffs raised concerns of global economic weakness. Since then it has recovered to about $65.
Earlier this month, sources told Reuters that the eight countries, in addition to another 411,000 bpd output hike for July, may unwind the remainder of their voluntary hikes by the end of October.
Wednesday's talks are scheduled to begin at 1300 GMT, the sources said.
