Opec+ increases output amid global uncertainty

A couple of months ago it would have been a brave call to say that Opec+ would be able to bring back 2.5 million barrels per day of crude production and still keep oil prices anchored around $70 (2,260 baht) a barrel.

- Clyde Russell is Asia Commodities and Energy Columnist at Reuters.

But this is exactly what has occurred, with the eight members of the producer group winding back the last of their 2.2 million bpd of voluntary cuts by September, as well as allowing a separate increase for the United Arab Emirates.

The eight Opec+ members met virtually on Sunday, agreeing to lift output by 547,000 bpd for September, adding to the increases of 548,000 bpd for August, 411,000 bpd for each of May, June and July, as well as the 138,000 bpd for April that kickstarted the unwinding of their voluntary cuts.

Opec+ stuck to their recent line that the rolling back of production cuts was justified by a strong global economy and low oil inventories.

It's debatable as to whether this is actually the case. Certainly, demand growth in the top-importing region of Asia has been lacklustre.

Asia's oil imports were about 25.0 million bpd in July, down from 27.88 million bpd in June and the lowest monthly total since July last year, according to data compiled by LSEG Oil Research.

While China, the world’s biggest crude importer, has been increasing purchases in recent months, much of this is likely because of lower prices that prevailed when Juneand July-arriving cargoes were arranged.