The Organization of the Petroleum Exporting Countries and its allies, the group known as OPEC+, is expected to increase production for the first time in a couple of years in 2025, an S&P Global executive told a conference on Monday.
Last week, OPEC+ agreed to delay a planned oil output increase for October and November after crude prices hit their lowest in nine months, adding that it could further pause or reverse the hikes if needed.
“We think in 2025 for the first time in a couple of years, first time since 2022, OPEC+ will increase production,” Jim Burkhard, vice president of research at S&P Global Commodity Insights, told the Asia Pacific Petroleum Conference (APPEC).
“There’s a lot of pressure in some of these countries to increase production, and again, some are already producing above.”
Oil futures jumped by a dollar in early trading on Monday as a potential hurricane system approached the U.S. Gulf Coast, and as markets recovered from a sell-off following the weaker-than-expected U.S. jobs data on Friday.
Overall, oil prices have been under pressure due to concerns about waning demand in key economies China and the U.S. – despite earlier expectations of summer demand being supportive, dipping from more than $90 a barrel earlier this year.
West Texas Intermediate crude futures rose nearly $1 to $68.61 a barrel by 0245 GMT. Brent crude futures were also up around $1 at $71.98 a barrel.
S&P Global’s Burkhard said that there is a lot of spare oil producing capacity globally currently, including over 5 million barrels per day of unused capacity in the Middle East.
“Even if OPEC+ does not increase (production)… the capacity is still going to be higher, which means there’s going to be unused capacity sitting there on the sidelines, and that is going to… (put) downward pressure on prices”, he said.
(Reporting by Florence Tan and Gabrielle Ng; Writing by Katya Golubkova; Editing by Kim Coghill and Muralikumar Anantharaman)