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Summary
- OPEC+ opted for modest hike due to glut concerns, sources say
- OPEC and non-OPEC supply rising
- Supply to far exceed demand in 2026
(Reuters) – OPEC+ oil-producing countries opted for only a modest rise to November output due to concerns about a potential global glut, sources within the group said, as non-OPEC supply also rises while fuel demand growth slows.
On Sunday, the group earmarked an extra 137,000 barrels per day for November, continuing monthly output boosts begun in April.
That was the smallest of the options the group discussed, three OPEC+ sources said, citing concerns about a looming oversupply.
OPEC declined to comment. The Saudi Arabian government office did not respond to a request for comment.
“OPEC+ stepped carefully after seeing how nervous the market had become,” said Jorge Leon of Rystad Energy and a former OPEC official.
Benchmark Brent oil prices fell 8% to below $65 per barrel last week after several media outlets, including Reuters, reported that OPEC+ was considering bigger increases.
Brent has traded at $60-$70 since OPEC+ began its output rises in April, down from $82 per barrel at the start of 2025.
The oil market’s monthly futures structure also shifted last week, indicating possible oversupply, which could have been another factor which influenced OPEC+ decision-making, Leon said.
Brent’s prompt price premium over six-month futures fell to 39 cents, the smallest since May. Premiums usually weaken when supply exceeds demand.
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The group says its market strategy is driven by fundamental supply and demand factors, not oil price targets.
Yet it appears de facto OPEC+ leader Saudi Arabia is prioritising regaining market share from rival producers, according to sources familiar with OPEC+ negotiations.
The OPEC+ planned output increases since April including November stand at more than 2.7 million barrels per day, or 2.5% of global demand, though the group has struggled to achieve them fully.
OPEC+ has so far reached about 75% of their aim as most producers have already reached capacity, data showed and analysts said.
Stockpiling by China and summer fuel demand have absorbed a lot of the additional supply.
But the market could face a growing surplus in coming months, many analysts predict, as the summer driving season and northern hemisphere autumn harvest ends and supply grows from OPEC+ as well as non-OPEC producers the United States, Brazil and Guyana.
The Paris-based International Energy Agency has forecast a 2026 surplus at twice that level – 3.3 million bpd.
OPEC’s latest available forecasts imply a 700,000 bpd deficit for 2026 if the group maintains output flat at August levels, according to Reuters calculations.
Since August, however, OPEC has already raised its output quotas by 821,000 bpd.
JP Morgan said that global oil and oil liquids inventories, including crude stored on water, have risen every week in September, adding 123 million barrels during the month.
For the first nine months of the year, total global liquid inventories rose by 269 million barrels, with China accounting for more than a third.
A jump in Middle Eastern and Russian crude exports in September will add to the surplus, JP Morgan said.
Oil exports from Russia, Saudi Arabia, Iraq, UAE, Kuwait and Oman jumped by 1.3 million bpd in September versus August, Kpler said.
Possible future disruptions to Russian exports due to sanctions and Ukrainian attacks and China’s stockpiling are two factors that are difficult to predict and could tighten supply and drive up demand, analysts polled by Reuters said.
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