OPEC+ meets 75% of target output hikes: Report

Logo of OPEC

OPEC+ managed to keep the oil market balanced in recent months, as actual supply hikes fell short of target levels since production increase plans began in April. This helped keep Brent crude prices near $69 per barrel.

The alliance delivered only about 75% of its planned output hikes between April and August — around 500,000 barrels per day below target. This shortfall supported prices and defied expectations of oversupply, Reuters reported.

Analysts attribute the gap mainly to two factors; some members making additional cuts to compensate for past overproduction, and a decline in spare production capacity — the extra supply that can be quickly brought online — amid lower investment levels.

As conditions evolve, compliance with production goals could fall to around 50% later this year due to capacity limits faced by certain member states.

The International Energy Agency put OPEC+ spare capacity at 4.1 million bpd as of August. But almost all of that is held by Saudi Arabia and the UAE, said an industry source who regularly buys oil from multiple OPEC+ producers.

OPEC+ is due to raise production by 547,000 bpd in September and a further 137,000 bpd in October.