OPEC+ further hikes oil output

PARIS

The eight key members of the OPEC+ alliance, including Saudi Arabia and Russia, have agreed a further slight hike to their oil production.

The 137,000-barrels-per-day hike will apply from December and remain at that level for the following three months, signifying a "pause" in what had been regular increases since April this year, the group said in a statement following a virtual meeting on Nov. 2.

The announced increase, which tallied with analyst expectations, has been seen as a bid by the key members of OPEC+, known as the Voluntary Eight (V8), to gain greater market share.

Since April, the V8 group, comprising Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman, has boosted production by around 2.7 million barrels per day (bpd) in total.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have sped up output increases at a pace very few had anticipated at the beginning of the year, following a long period of producers seeking to combat price erosion by implementing production cuts to make oil scarcer.

But faced with growing competition, particularly from U.S. shale oil producers, gaining a larger share of the oil market has become the group's main priority.

But Emily Ashford, an energy analyst at Standard Chartered bank, said an increase in OPEC+ quotas of 137,000 barrels would result in lower actual production, limiting the impact on prices.

Looking forward, some V8 members that have exceeded their output quotas in the past will need to compensate for their overproduction, and Russia in particular "is already at full capacity", Ashford told AFP.