OPEC+ Poised to Delay Oil Output Hike Amid Crude Price Slump

OPEC+ is on the brink of delaying a scheduled October oil production increase due to declining crude prices and global economic concerns. The potential delay has caused oil prices to rise, with Brent crude hitting $73 a barrel. The planned increase involved 180,000 barrels per day.

OPEC+ is reportedly close to postponing a slated October oil production hike, sources from the group disclosed to Reuters on Thursday. This move comes as crude prices plummet to their lowest levels in nine months amid global economic worries and weak data from China, the world's largest oil importer.

According to one source, member countries are likely to take steps to stabilize the market by delaying the production increase. This sentiment was echoed by another source who confirmed that the group was nearing an agreement. The prospect of a delay has already pushed Brent crude prices up to $73 a barrel, although they remain near their lowest since December.

The scheduled hike was for 180,000 barrels a day, a fraction of the 5.86 million barrels per day OPEC+ is withholding—equivalent to about 5.7% of global demand. The delay highlights the fragile sentiment in the oil market, intensified by expectations of more OPEC+ supply and an end to a stalemate affecting Libyan exports. The group had earlier planned to follow through with the increase as part of a broader strategy outlined in June.

HSBC analysts noted that any decision by OPEC+ could be perceived negatively by the market. Meanwhile, RBC Capital analyst Helima Croft suggested that it might be wise for OPEC+ to wait until December before boosting production. The planned October hike is part of an unwind strategy for output cuts agreed upon in June, set to extend through September 2025.

OPEC+ initially agreed to output reductions to sustain market prices in the face of an uncertain demand outlook and increasing supply from non-member countries. This strategy included maintaining earlier cuts until the end of 2025.

(With inputs from agencies.)