September 26, 2022

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Oil Prices Jump As OPEC+ Confirms 648,000 Bpd Production Hike

2 min read

The OPEC+ meeting ended in a relatively quick fashion on Thursday, agreeing to boost production by 648,000 bpd in August, according to Energy Intel’s Chief OPEC Correspondent, Amena Bakr.

The Joint Ministerial Monitoring Committee meeting (JMMC), which began at 13:00 Vienna time (7:30 a.m. ET), was followed by the full OPEC+ ministerial meeting. The latter was not expected to offer any surprise, with the majority of analysts predicting that the group would rubberstamp the quota increase that it had previously set for August of 648,000 bpd.

At that increase, the quota–set two years ago–would be completely rolled back.

This would free up some of its members that have spare capacity to boost production in September if they choose, although the lack of compliance with the current quotas suggests that any ramp-up in production to meet August’s quota–and beyond–is doubtful.

While it’s clear that the production cuts will officially be completely rolled back as of August, the OPEC+ group has signaled that it intends to stick together to provide support to the market, with consistent signals coming from the group over the last couple of months that the alliance with Russia would continue. Four OPEC+ delegates told Reuters, however, that today’s meeting would not include discussions about September’s production plans. Two others said that the topic of September production could come up.

OPEC is set to hold its next meeting on August 3, which will determine September production plans, Bakr said in a tweet following the meeting.

The group’s first in-person meeting since the pandemic is scheduled for the first week of December.

Oil prices were slightly higher on Thursday minutes after the meeting, with Brent crude trading at $116.00 (-0.22%).

By Julianne Geiger for Oilprice.com

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