OIL: Analysts Split on Whether OPEC Return Supply as Planned in Q4

Analysts are split on whether OPEC will reduce its output cuts as planned from October, according to Bloomberg. 

• A survey of traders, refiners and analysts showed 12 respondents expect OPEC will proceed, 11 expect it will postpone the output increase and 5 expect either a partial increase, or contingent on lasting supply disruption in Libya.
• OPEC provisionally plans to return 543kb/d of supply during Q4 but the group has previously stressed the policy remains flexible if the market appears to be oversupplied.
• Several OPEC+ delegates said they currently expect the hikes to go ahead, though at least one argued for a need to delay.
• The market outlook has seen bearish pressure in recent weeks with focus on soft demand growth in China, raising the prospects that OPEC many need to adjust the current plans.
• Some analysts forecast the global oil markets could switch from a deficit to a surplus next quarter if OPEC returns supply as planned.
• The next Joint Ministerial Monitoring Committee isn’t until Oct. 2 but further clarity could be expected in early September when new Saudi OSPs and allocations are announced.