OPEC+ raises output quota ceiling for September by 100,000 barrels per day

The Organisation for Petroleum Exporting Countries and its main allies, whom together are known as OPEC+, revised their combined output quotas for September higher but by far less than in the previous month.

Nevertheless, Brent crude oil futures slipped in response, possibly as some analysts had been anticipating for a long time that the cartel would be unable to continue raising its quotas at the same pace as earlier in the year due to a lack of spare capacity in most member countries.

As of 1638 BST, front-dated Brent crude oil futures were slipping by 2.03% to $98.51 a barrel on the ICE.

Producer nations agreed on a 100,000 barrel per day hike in their quotas for the following month, following the 648,000 b/d increase decided on for August.

Furthemore, as Edward Gardner, commodities economist at Capital Economics pointed out, actual production by OPEC+ ran at just 38m b/d in June, versus a quota for 40.8m b/d.

All of the above was on top of an expected decline in drawdowns from the US Strategic Reserve from approximately 8m b/d at their peak in June to 5m b/d at present and with a further dwindling anticipated through to October.

Capital Economics's forecast for the remainder of 2022 was for Brent crude oil to settle at around $100 per barrel.