The world's biggest oil producers of the Organization of Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, agreed Wednesday to increase production by 100,000 barrels per day (bpd) in September.
The 23-members of the group held the 31st ministerial meeting via videoconference to discuss the production volume for September.
The group said they would continue the plan of increasing output by 100,000 bpd in September 'in view of the latest oil market fundamentals.'
The OPEC+ group, mindful of the “dynamic and rapidly evolving oil market fundamentals, said the severely limited availability of excess capacity necessitates utilizing it with great caution in response to severe supply disruptions.”
Given the 'chronic underinvestment in the oil sector', the group said it has reduced excess capacities along the value chain.
Specifically pointing to insufficient investment in the upstream sector, the group warned that it would impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil-producing countries, some OPEC member countries and participating non-OPEC oil-producing countries.
The group cited preliminary data for OECD commercial oil stocks level, showing a fall in stocks which stood at 2,712 million barrels in June 2022, or 163 million barrels lower than the same time last year, and 236 million barrels below the 2015-2019 average.
'Emergency oil stocks have reached their lowest levels in more than 30 years,' it said.
OPEC+ had reduced daily crude oil production by approximately 10 million barrels in April 2020 due to the sharp decline in demand following the emergence of the COVID-19 pandemic.
As global economies and oil demand started to recover, the group also began to ease these cuts incrementally from April 2021.
The next meeting of OPEC and non-OPEC members is scheduled for Sept. 5.
By Sibel Morrow