The world's major oil producers on late Wednesday agreed on sticking to the existing production policy by approving an incremental increase of up 400,000 barrels per day (bpd) each month by the end of this year.
The 23-members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, held the 20th OPEC and non-OPEC Ministerial Meeting (ONOMM) via videoconference.
The group, previously in the July meeting, had agreed to raise output by 400,000 bpd from August to December and extend its production cut agreement from April 2022 to December 2022.
In a press release after the meeting, the group said it reconfirmed the production adjustment plan, the monthly production adjustment mechanism approved at the 19th ONOMM, and the decision to adjust upward the monthly overall production by 400,000 bpd for October.
'While the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates,' the statement read.
The group added that the meeting welcomed the positive performance of participating countries in the Declaration of Cooperation (DoC) and overall conformity to the production adjustments was 110% in July including Mexico (109% without Mexico), reinforcing the trend of high conformity by participating countries.
The next meeting of OPEC and non-OPEC members is scheduled for Oct. 4.
- Oil prices decreased more than 1%
Oil prices retreated after the meeting over the double whammy of demand worries due to the rising coronavirus cases and the OPEC+ decision to pump more oil into the market.
Brent reached $70.78 per barrel, decreasing 1.18% after closing Tuesday at $71.63 a barrel.
American benchmark West Texas Intermediate (WTI) was at $67.62 per barrel at the same time for a 1.28% decrease after it ended the previous session at $68.50 a barrel.
- US's output call to OPEC+
In August, US President Joe Biden's national security adviser Jake Sullivan urged OPEC and its allies to boost oil output to tackle rising gasoline prices that they see as a threat to the global economic recovery.
He noted that, if not controlled, rising gasoline prices carry the risk of hurting the current economic recovery, adding that, 'at a critical moment in the global recovery, this is simply not enough.'
By Firdevs Yuksel & Ebru Sengul Cevrioglu