Discussions between Opec-plus countries have begun after a series of monthly production increases, reports Bloomberg with reference to delegates with insight into the development. And they take place ahead of what is expected to be a crucial decision on August 3 – where production volumes for September are finalized.
Unexpectedly large increase
Opec-plus surprised the market last week with an unexpectedly large production increase of 548,000 barrels per day from August. This increase follows decisions on increases of 411,000 barrels per day in May, June, and July.
The oil countries in the group are thus well on their way to having withdrawn a previously decided production cut of 2.2 million barrels to September. After that, Opec-plus discusses a pause in the ongoing production increase.
The production increases this year have pushed down the oil price globally and come at the same time as China's demand is dampened by weak economic development and the US production has increased.
Global surplus in the autumn
A futures contract for delivery of so-called Brent oil next month – a benchmark on the oil market – fell 0.7 percent to just under $70 per barrel after Bloomberg reported on Opec's discussions about production increases.
According to the Western energy agency IEA, the world market is facing a surplus of oil equivalent to 1.5 percent of global consumption in the fourth quarter.
In addition to the international oil price, the prices of fossil fuels in Sweden are mainly affected by the dollar exchange rate, taxes, and VAT.
