OPEC and its allies are likely to stick to their existing agreement to add 400,000 barrels per day (bpd) of oil to the market in November, three OPEC+ sources said on Monday, despite pressure from consumers to cool a red hot market.
An OPEC+ ministerial panel, known as the JMMC, that monitors the market has recommended that the group stick to its existing oil output policy by increasing production by 400,000 barrels per day (bpd) in November, OPEC+ source said on Monday.
Ministers from The Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+, are due to gather online at 1300 GMT.
An OPEC+ ministerial panel that monitors market developments, known as JMMC, meets before that.
Brent crude was down 14 cents or 0.2 percent at $79.14 per barrel in earlier trading. It rose 1.5 percent last week, its fourth weekly gain in a row. U.S. oil dropped by 15 cents or 0.2 percent to $75.73, after gaining for the past six weeks.
Oil prices have risen due to the supply disruptions and a rise in global demand, pushing Brent last week above $80 to a near three-year high.
The #Opec+ JMMC meets today at 14:00 Vienna time to be followed by the full Opec+ ministerial meeting at 15:00.
And despite continued rumblings that a larger quota hike may be needed, delegates say Opec+ still leaning towards agreeing a 400k b/d hike for November. #oott
— Nader Itayim | نادر ایتیّم (@ncitayim) October 4, 2021
Risk appetite has been "boosted by growing confidence in a strong pick up in global growth," ANZ Research said in a note, but added that investors were now focused on the OPEC+ meeting due later on Monday.
OPEC+ agreed in July to boost output by 400,000 barrels per day (bpd) every month until at least April 2022 to phase out 5.8 million bpd of existing cuts. Four OPEC+ sources told Reuters recently that producers were considering adding more than that deal envisaged.
The earliest any increase would take place would be November since the previous OPEC+ meeting decided October volumes.
The oil price rally has also been fuelled by an even bigger increase in gas prices that have spiked 300 percent and are trading around $200 per barrel in comparable terms, prompting switching to fuel oil and other crude products to generate electricity and for other industrial needs.
"The uneven nature of the post-pandemic recovery will keep demand-side uncertainties in play, giving rise to oil price volatility," Fitch Solutions said in a note.