OPEC decides to increase production by 500,000 bpd from 1 November
The oil exporting countries’ organisation OPEC has decided to increase production by 500,000 bpd from 1 November, equal to adding a Suezmax load of cargo to the market every second day or a VLCC each four days. “The Conference further observed the recent shift of the forward market into backwardation and its implications on stocks. It also noted that the high-demand winter season necessitates keeping the market adequately supplied,” OPEC announced after its meeting in Vienna yesterday. “To this end, the Conference decided to increase the volume of crude supplied to the market by OPEC Member Countries (excluding Angola and Iraq) by 500,000 bpd, effective 1 November,” it concluded. Observers noted that the moves does little more than legitimise what is already happening. According to Bloomberg, Opec members already pump 900,000 bpd more than their official quotas, making the agreed increase of 500,000 bpd from the 1st November is just the playing out of a game of catch-up. While the price is close to record levels of $80/bbl, the dollar has reached a record low against the Euro, prompting producers to pump above their quotas to maintain levels. However, analysts are starting to question how much more oil Opec countries can produce.