OPEC+ Oil-Producing Countries Meeting to Decide on Additional Oil Production Increase... Concerns Over Rising Oil Price Volatility

OPEC+ Oil-Producing Countries Meeting to Be Held on the 4th

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Oil prices are under upward pressure ahead of the meeting of OPEC Plus (OPEC+), a coalition of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries including Russia. If OPEC+ does not decide on additional production increases, oil prices are expected to react sensitively to the recovery of U.S. oil production and weekly crude oil inventory changes.

According to the securities industry on the 3rd, on the 1st (local time), November delivery West Texas Intermediate (WTI) crude oil closed at $75.88 per barrel (about 90,000 KRW), up 1.1% from the previous trading day. WTI prices rose 2.6% just this week.

The securities sector emphasized the need to focus on the OPEC+ oil-producing countries meeting scheduled for the 4th. At this meeting, OPEC+ is expected to decide on November production levels. International oil prices have sharply risen since Hurricane Ida in the U.S. Some argue that OPEC+ oil-producing countries should accelerate production increases to stabilize oil prices. In particular, the U.S. has mentioned the necessity of additional production increases.

However, it is expected that OPEC+ will not change its existing production increase path at this meeting. Despite the U.S. stance on additional production increases, OPEC+ is downplaying the possibility. Furthermore, the monthly report’s demand forecast shows no significant changes.

If OPEC+ maintains the existing crude oil supply path of a monthly average daily increase of 400,000 barrels, oil prices are unlikely to fluctuate significantly for the time being. However, supply disruptions in the U.S. are gradually being resolved. The U.S. Energy Information Administration (EIA) forecasted in its September Short-Term Energy Outlook that U.S. oil production will recover to pre-Hurricane Ida levels in October.

Shim Soo-bin, a researcher at Kiwoom Securities, explained, “Oil prices will respond to the recovery trend of U.S. oil production and weekly crude oil inventory changes. However, additional oil price increases in October will be somewhat limited.”

This content was produced with the assistance of AI translation services.