Saudi Arabia and OPEC+ are considering an August production increase, amid a recovery in demand
Select members of the producer group will meet on Wednesday July 15 to discuss their currently policy aimed at cutting 9.7 MMBbl/d from April, and later extended through July, according to OPEC. Saudi Arabia, the de facto leader of OPEC, has proposed a 2 MMBbl/d increase in production for the group to bring the new amount of reductions to 7.7 MMBbl/d, according to delegates and the Wall Street Journal.
The OPEC capacity chart (top right) shows current production and available capacity per member, according to Bloomberg estimates. The total available capacity stands at about 9 MMBbl/d if excluding Iran and Venezuela Economics sanctions depressed both country’s output.
Brent crude prices have rallied over 100% to near $42/Bbl since OPEC+ supply quotas were negotiated in April. The historic cuts by OPEC+ have helped reduce the amount of oil headed for storage. There are now indications that global demand is recovering. Mandatory stay-at-home orders and business restrictions have eased, prompting OPEC+ to discuss bringing some supply back to the market.