LONDON/DUBAI: OPEC+ is expected to stick to an oil production agreement reached last year at its June 2 meeting and raise July production targets by 432,000 barrels per day, six said OPEC+ sources told Reuters, pushing back on Western calls for a faster rise to curb soaring prices.
Western nations, grappling with record inflation rates that threaten economic growth, have repeatedly called on the group to speed up its production increases.
Group members argue that the oil market is balanced and recent price increases are unrelated to fundamentals.
Under a deal reached in July last year, the Organization of the Petroleum Exporting Countries and its Russian-led allies eased record production cuts in installments of around 400,000 bpd each month.
The cuts are set to be reversed entirely by the end of September, but the group’s oil output has actually fallen sharply, with sanctions and buyer reluctance hitting Russian production, and Nigeria and Angola pumping well below the goal.
“Why change what works perfectly? said one of the sources.
“We will announce that we will increase our production by 432,000 bpd even if we are no longer able to do so,” he added.
In April, OPEC+ produced 2.6 million bpd below its target, according to internal data, with Russia accounting for half the shortfall.
Russian Deputy Prime Minister Alexander Novak said oil and condensate production in the country is expected to drop more than 8% to 480-500 million tonnes this year.
Oil prices rose 5% on the month so far in May, largely on expectations that the European Union will agree to an oil embargo on Russian supplies.
Brent crude was trading near $115 a barrel on Thursday.
The President of the European Council, Charles Michel, said on Wednesday that he was convinced that an agreement could be found before the next Council meeting on May 30.
Russia has dramatically increased its oil sales to China and India, with sales to European buyers becoming more problematic.