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Oil traders can’t seem to agree on where OPEC+ will steer production next, and it’s anyone’s guess if the cartel’s December hike is still on the table. OPEC+ has touted plans for a boost, but the group’s go-to mantra—adjusting output based on market ‘realities’—is giving traders pause.
According to a Bloomberg poll published on Wednesday, 16 of 30 traders are betting that OPEC+ will hold off on the planned increase, deferring to Saudi Arabia’s top-down approach, where the Kingdom’s Energy Minister, Prince Abdulaziz bin Salman, wields the real clout. Saudi Arabia has led the way with deep production cuts and has, time and again, picked up the slack from other OPEC members skirting their quotas. It also has a history of getting other members on board with even painful production plans.
OPEC+ faces a tightrope act: juggle individual members’ oil revenue targets, keep up appearances on compliance, and somehow align on a single demand outlook. This month’s OPEC Monthly Oil Market Report downgraded demand growth for 2024 to 1.9 million bpd—a post-COVID high but below recent peaks—while demand forecasts for 2025 slipped another 102,000 bpd to 1.6 million bpd. China, meanwhile, ramped up imports by 16% month over month in August, but the rise still falls short of August 2023 levels, muddying the waters on demand and keeping oil markets on edge.
For now, it seems, traders are split, and OPEC+ has a few weeks to pull the lever on a hike, delay, or another round of cuts. All eyes are on November 12, when OPEC’s next Monthly Oil Market Report (MOMR)—and Saudi’s Official Selling Price (OSP) announcement that will surely follow—could tip the scales.
As of Wednesday morning, oil prices were recovering slightly from their early week crash, with WTI up 1.46% at $68.19 and Brent trading at $72.18 after climbing 1.49%.
