OPEC and its allies again have failed to produce enough oil to meet their output goals, intensifying the supply deficit as the world rebounds from the COVID-19. CL! up +0.67%
- OPEC+ cut its production target by 15% lower than initially planned in September, compared with 16% in August and 9% in July.
- The situation reflects the inability of some OPEC members, including Nigeria, Angola, and Azerbaijan, to increase output to the set volumes due to the lack of funding, exploration, and other major issues.
- Theoretically, OPEC+ could have expanded 747,000 barrels a day in September and still remain with its agreed production limit.
- OPEC and its allies have come under pressure from major consumers to increase the rate of their supply increases.
- These pressures have intensified as the energy crisis has increased in Europe, pushing power prices to record-highs.
- If the oil prices do not recover, the upcoming OPEC+ meeting on November 4th could happen with intensified political pressure from consumers.