OPEC+ production increase rumors reversed, where will oil prices go next?
2025-10-01 01:42:40
The global oil market stands at a delicate crossroads. Kuwait Petroleum Corporation CEO Sheikh Nawaf Al-Sabah recently expressed optimism, emphasizing that global oil demand remains strong, providing confidence for OPEC+ to gradually increase production. However, the market has been caught in a tug-of-war between rumors of production increases and OPEC officials' firm rebuttals, sending oil prices below $70 per barrel this week, reaching around $66. This article delves into OPEC+'s strategy, market reactions, and future trends, aiming to provide investors and observers with a more comprehensive perspective.
Kuwait expresses optimism: growing demand will support production increases
Sheikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation, stated that global oil demand growth has exceeded many traders' expectations, particularly in emerging markets such as China and India. He noted, "The market's resilience gives us the confidence to gradually increase supply." Kuwait's current daily production capacity has climbed to 3.2 million barrels, a decade-high, and it has "substantial" spare capacity, ready to inject more crude oil into the market.
This statement is highly consistent with OPEC+'s strategy of gradually lifting production cuts since April of this year. Over the past six months, the group has released over 2.5 million barrels per day (bpd) of quota, representing approximately 2.4% of global demand. Sabah emphasized that the pace of production increases is "slow and measured," effectively avoiding significant price fluctuations. Brent crude oil prices have recently fluctuated between $66 and $70 per barrel, well above the $60 low predicted by some bears at the beginning of the year, demonstrating that demand is indeed providing a buffer to the market.
Rumors of a production increase have sparked controversy: 500,000 barrels per day sparked heated debate
Reuters quoted OPEC+ insiders as saying that the upcoming meeting on October 5 may discuss further production increase plans: canceling the production cut quota of 137,000 barrels/day in October and canceling the same amount in November as a gradual lifting of the total production cut plan of 1.65 million barrels/day.
Even more alarming was an anonymous report circulating on platform X claiming that OPEC+ was considering increasing production by 500,000 barrels per day (bpd) per month for three months to counter the market expansion of non-OPEC+ producers like the United States and Brazil, which were expected to add 1.4 million bpd in supply by 2025. This rumor quickly ignited market sentiment.
A professional investor said: "An increase of 500,000 barrels per day may push Brent to $62 or even lower!" Bloomberg columnist analyzed that OPEC+'s move may be to seize market share before the surge in non-OPEC+ supply, but the risk is to aggravate inventory backlogs.
The IEA's latest monthly report predicts that global inventories may increase by 700,000 barrels per day in 2025. If OPEC+ increases production aggressively, downward pressure on oil prices will significantly intensify.
OPEC responds strongly: Rumors are "groundless"
In response to the market turmoil, the OPEC Secretariat quickly responded, calling rumors of a 500,000 barrels per day (bpd) production increase "completely inaccurate and misleading." The core G8 members (Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, etc.) have yet to engage in formal discussions on the matter, emphasizing that any production decisions will be based on market data, not "media speculation." ZeroHedge, a website, directly labeled these rumors "smokescreens manipulated by short sellers" to drive down oil prices in order to build positions at a low level.
OPEC's rebuttal is not groundless. Historical data shows that the group's actual production increases often fall short of agreed quotas. For example, the planned 430,000 barrels per day increase in August only achieved about 75% of that target. This was due to capacity constraints in some member countries (such as Nigeria and Angola), while countries like Iraq were still making compensatory cuts to compensate for previous overproduction. Reuters analysis indicates that OPEC+'s cautious approach reflects its focus on balancing supply and demand, particularly given the ongoing uncertainty surrounding the global economic recovery.
Oil prices fluctuate at low levels: geopolitical and supply-demand competition intensifies
Oil prices came under significant pressure this week due to a back-and-forth between rumors and rebuttals. Brent crude futures fell to $66.65 per barrel, down 2.8% from the previous week, while WTI crude hit $63.05, down 2.44% for the month. The EIA's short-term outlook warns that if OPEC+ fails to coordinate effectively, inventory overhangs could push oil prices below $60 by early 2026. However, the IEA's monthly report also indicates that global demand is expected to grow by 740,000 barrels per day in 2025. Supported by the resilience of OECD economies and high refinery capacity in emerging markets (throughput reaching 851,000 barrels per day), oil price declines may be limited in the short term. Geopolitical uncertainty is adding further uncertainty to the market.
The recent resumption of oil exports from Iraqi Kurdistan, adding 230,000 barrels per day (bpd), further exacerbates supply pressures. Meanwhile, Russia may reduce exports due to escalating Western sanctions, potentially supporting oil prices. A easing of the Gaza conflict could reduce the war premium (approximately $3-5 per barrel) in oil prices, but the situation between Russia and Ukraine remains unresolved.
Clash of market views: cautious optimism or excessive pessimism?
Market interpretations of OPEC+'s strategy are polarized. Bullish investors believe that optimistic statements from countries like Kuwait reflect solid demand fundamentals. Morgan Stanley predicts in its latest report that Brent prices will average above $70 in 2025, driven by a continued recovery in global demand for jet fuel and petrochemicals.
On the other hand, UBS analyst Giovanni Staunovo warned that if OPEC+ accelerates production increases, coupled with non-OPEC+ supply growth, oil prices may fall below $60 in 2026, especially against the backdrop of a global economic slowdown.
Kuwait expresses optimism: growing demand will support production increases
Sheikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation, stated that global oil demand growth has exceeded many traders' expectations, particularly in emerging markets such as China and India. He noted, "The market's resilience gives us the confidence to gradually increase supply." Kuwait's current daily production capacity has climbed to 3.2 million barrels, a decade-high, and it has "substantial" spare capacity, ready to inject more crude oil into the market.
This statement is highly consistent with OPEC+'s strategy of gradually lifting production cuts since April of this year. Over the past six months, the group has released over 2.5 million barrels per day (bpd) of quota, representing approximately 2.4% of global demand. Sabah emphasized that the pace of production increases is "slow and measured," effectively avoiding significant price fluctuations. Brent crude oil prices have recently fluctuated between $66 and $70 per barrel, well above the $60 low predicted by some bears at the beginning of the year, demonstrating that demand is indeed providing a buffer to the market.
Rumors of a production increase have sparked controversy: 500,000 barrels per day sparked heated debate
Reuters quoted OPEC+ insiders as saying that the upcoming meeting on October 5 may discuss further production increase plans: canceling the production cut quota of 137,000 barrels/day in October and canceling the same amount in November as a gradual lifting of the total production cut plan of 1.65 million barrels/day.
Even more alarming was an anonymous report circulating on platform X claiming that OPEC+ was considering increasing production by 500,000 barrels per day (bpd) per month for three months to counter the market expansion of non-OPEC+ producers like the United States and Brazil, which were expected to add 1.4 million bpd in supply by 2025. This rumor quickly ignited market sentiment.
A professional investor said: "An increase of 500,000 barrels per day may push Brent to $62 or even lower!" Bloomberg columnist analyzed that OPEC+'s move may be to seize market share before the surge in non-OPEC+ supply, but the risk is to aggravate inventory backlogs.
The IEA's latest monthly report predicts that global inventories may increase by 700,000 barrels per day in 2025. If OPEC+ increases production aggressively, downward pressure on oil prices will significantly intensify.
OPEC responds strongly: Rumors are "groundless"
In response to the market turmoil, the OPEC Secretariat quickly responded, calling rumors of a 500,000 barrels per day (bpd) production increase "completely inaccurate and misleading." The core G8 members (Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, etc.) have yet to engage in formal discussions on the matter, emphasizing that any production decisions will be based on market data, not "media speculation." ZeroHedge, a website, directly labeled these rumors "smokescreens manipulated by short sellers" to drive down oil prices in order to build positions at a low level.
OPEC's rebuttal is not groundless. Historical data shows that the group's actual production increases often fall short of agreed quotas. For example, the planned 430,000 barrels per day increase in August only achieved about 75% of that target. This was due to capacity constraints in some member countries (such as Nigeria and Angola), while countries like Iraq were still making compensatory cuts to compensate for previous overproduction. Reuters analysis indicates that OPEC+'s cautious approach reflects its focus on balancing supply and demand, particularly given the ongoing uncertainty surrounding the global economic recovery.
Oil prices fluctuate at low levels: geopolitical and supply-demand competition intensifies
Oil prices came under significant pressure this week due to a back-and-forth between rumors and rebuttals. Brent crude futures fell to $66.65 per barrel, down 2.8% from the previous week, while WTI crude hit $63.05, down 2.44% for the month. The EIA's short-term outlook warns that if OPEC+ fails to coordinate effectively, inventory overhangs could push oil prices below $60 by early 2026. However, the IEA's monthly report also indicates that global demand is expected to grow by 740,000 barrels per day in 2025. Supported by the resilience of OECD economies and high refinery capacity in emerging markets (throughput reaching 851,000 barrels per day), oil price declines may be limited in the short term. Geopolitical uncertainty is adding further uncertainty to the market.
The recent resumption of oil exports from Iraqi Kurdistan, adding 230,000 barrels per day (bpd), further exacerbates supply pressures. Meanwhile, Russia may reduce exports due to escalating Western sanctions, potentially supporting oil prices. A easing of the Gaza conflict could reduce the war premium (approximately $3-5 per barrel) in oil prices, but the situation between Russia and Ukraine remains unresolved.
Clash of market views: cautious optimism or excessive pessimism?
Market interpretations of OPEC+'s strategy are polarized. Bullish investors believe that optimistic statements from countries like Kuwait reflect solid demand fundamentals. Morgan Stanley predicts in its latest report that Brent prices will average above $70 in 2025, driven by a continued recovery in global demand for jet fuel and petrochemicals.
On the other hand, UBS analyst Giovanni Staunovo warned that if OPEC+ accelerates production increases, coupled with non-OPEC+ supply growth, oil prices may fall below $60 in 2026, especially against the backdrop of a global economic slowdown.
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