OPEC+ will probably continue with its production ramp-up next year regardless of where prices are going, according to traders who believe the expected oversupply in crude will not be large enough to discourage OPEC+ from boosting output.
Bloomberg surveyed 25 traders and analysts focused on energy and said that 67% of them expected OPEC+ to keep adding to production next year, while the remainder expected the group to suspend or reverse the ramp-up.
OPEC+ has been ramping up production after two years of cuts as international oil prices remain depressed amid rising non-OPEC supply and predictions of weak demand. The group, however, agreed at its last monthly meeting to pause the output additions in early 2026 in a signal that the market interpreted as an acknowledgment of the oversupply situation. Next month, OPEC+ would only add a modest 137,000 bpd to its combined output.
In its latest monthly oil market report, the group further contributed to the bearish mood, expecting non-OPEC supply growth alone next year to hit 1.3 million barrels daily, while global demand for the commodity was seen growing at 1.6 million barrels daily for a total of 106.2 million barrels daily at the end of the year.
Traders said the latest revision confirms that supply is overtaking earlier demand assumptions, especially as the International Energy Agency’s updated data also pointed to slower consumption growth.
“To reverse policy and commit to cuts is likely only if demand undergoes a visible collapse, prices fall past $50, and it becomes clear to OPEC’s leaders that a policy shift back to market management is necessary,” a senior analyst from Eurasia Group told Bloomberg in comments on market expectations.
For now, there are no indications of such a trend. What’s more, lower prices are only likely to spur more demand as tends to happen in cyclical industries.
By Irina Slav for Oilprice.com
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