OPEC+ Poised to Keep Pumping Despite Rising Oversupply Fears

Core Viewpoint - OPEC+ is likely to continue increasing production next year despite expectations of oversupply in the crude market, as a significant portion of traders believe the group will maintain its output ramp-up [1][2]. Group 1: Production Trends - OPEC+ has been increasing production after two years of cuts due to depressed international oil prices, rising non-OPEC supply, and weak demand predictions [2]. - The group agreed to pause output additions in early 2026, indicating an acknowledgment of the oversupply situation [2]. - Next month, OPEC+ plans to add a modest 137,000 barrels per day (bpd) to its combined output [2]. Group 2: Supply and Demand Forecasts - The latest monthly oil market report from OPEC+ indicates that non-OPEC supply growth is expected to reach 1.3 million bpd next year, while global demand is projected to grow by 1.6 million bpd, totaling 106.2 million bpd by the end of the year [3]. - The revision of supply and demand expectations suggests that supply is outpacing earlier demand assumptions, with the International Energy Agency also reporting slower consumption growth [4]. Group 3: Market Reactions and Future Expectations - Traders believe that a reversal in OPEC+ policy to implement cuts would only occur if there is a visible collapse in demand, prices fall below $50, and a clear need for market management arises [4]. - Currently, there are no signs of such a trend, and lower prices may actually stimulate more demand, consistent with cyclical industry behavior [5].