APPEC/S&P Global predicts OPEC+ will increase their oil production next year

An executive from S&P Global told a Monday conference that the Organization of the Petroleum Exporting Countries (OPEC+) and its allies are expected to increase their production in 2025 for the first time since a few years.

OPEC+ agreed last week to postpone a planned increase in oil production for October and November after crude prices fell to their lowest level in nine months. It added that it could further pause, or reverse, the hikes if necessary.

Jim Burkhard told the Asia Pacific Petroleum Conference that OPEC+ would increase its production in 2025, for the first in a few years and the first since 2022.

Some of these countries are under a lot pressure to increase their production. And again, they're already doing so.

Early trading on Monday saw oil futures jump by $1 as a possible hurricane system approached the U.S. Gulf Coast and markets recovered from the sell-off that followed Friday's weaker than expected U.S. job data.

Oil prices are under pressure because of concerns over a waning market in the U.S. and China, even though earlier expectations were that summer demand would be supportive. Prices had dropped from $90 per barrel to less than $60 earlier this year.

West Texas Intermediate crude futures were up nearly $1 at $68.61 per barrel as of 0245 GMT. Brent crude futures also rose around $1 to $71.98 per barrel by 0245 GMT.

S&P Global’s Burkhard stated that there are a large number of spare oil production capacity around the world, including more than 5 million barrels of capacity per day in the Middle East.

He said: "Even if OPEC+ doesn't increase (production )..., the capacity will still be higher. This means that there will be unused capacity on the sidelines. And this is going to... put downward pressure on prices". Reporting by Florence Tan, Gabrielle Ng and Katya Glubkova. Editing by Kim Coghill & Muralikumar Aantharaman.

(source: Reuters)