OPEC+ Cuts Production Increase by 85% to Stabilize Oil Prices

International oil prices experienced a rebound on Monday, recovering some of the losses from the previous week. This surge came after OPEC+ reached an agreement to slow down the pace of its production increase starting from October, citing expectations of a weakening global demand. The decision by OPEC+ is aimed at stabilizing the oil market and preventing a potential oversupply, which could further weaken prices. The organization has been gradually increasing its production since April of this year, but the recent slowdown in demand growth has prompted a change in strategy.

The decision to slow down the increase in production is expected to support oil prices in the coming months, as the market adjusts to the new supply dynamics. The move by OPEC+ is also seen as a preemptive measure to avoid a repeat of the price collapse that occurred earlier this year, when the organization was caught off guard by a sudden drop in demand due to the pandemic. The decision to slow down the increase in production is expected to have a positive impact on oil prices, as it will help to balance the market and prevent a potential oversupply. The move by OPEC+ is also seen as a signal to the market that the organization is committed to stabilizing prices and supporting the industry.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies, decided to continue increasing production at a slower pace starting from October. This decision comes as the core member country, Saudi Arabia, attempts to regain market share. The organization had previously announced a gradual increase in production starting in April, but the recent decision to further expand production has surprised the market, especially as the northern hemisphere's winter peak oil season approaches, potentially leading to an oversupply.

According to a statement released after an online meeting on Sunday, the OPEC+ eight-country group agreed to increase daily production by 137,000 barrels starting from October. This increase is significantly lower than the previous levels—955,000 barrels per day in September and August, and 411,000 barrels per day in July and June. The decision to slow down the increase in production is expected to have a positive impact on oil prices, as it will help to balance the market and prevent a potential oversupply. The move by OPEC+ is also seen as a signal to the market that the organization is committed to stabilizing prices and supporting the industry.