OPEC+ Expected to Extend Pause on Oil Hikes as Prices Stay Weak

Core Viewpoint - OPEC+ is expected to maintain its decision to pause oil production increases during the upcoming online meeting, reflecting a cautious approach amid signs of oversupply and weak prices [1][2]. Group 1: OPEC+ Meeting Insights - The meeting is anticipated to be straightforward, with ministers reaffirming the policy to suspend output hikes through the first quarter of 2026, primarily driven by Saudi Arabia and its partners [2]. - The pause in production is a response to rising global inventories that are outpacing demand, with Brent crude prices around $63 per barrel [2][4]. - OPEC+ plans to continue voluntary output cuts by key members like Saudi Arabia and Iraq until early 2026, while some members are reviewing long-term production capacity for potential increases later in the year [7][8]. Group 2: Market Dynamics - The energy market is currently delicate, influenced by geopolitical factors such as U.S. President Donald Trump's push for a Ukraine peace deal, which could increase Russian oil supply [3]. - OPEC's analysis indicates that non-OPEC liquids production is expected to rise by approximately 1.3 million barrels per day (bpd) next year, while global demand is forecasted to increase by 1.6 million bpd to 106.2 million bpd, which may not be sufficient to tighten market balances [4]. - The International Energy Agency warns of a potential inventory increase of up to 5 million bpd in the first quarter of 2026, which could lead to a record glut and further pressure on prices [5]. Group 3: OPEC's Position - OPEC Secretary-General Haitham al Ghais has countered claims of oversupply, asserting that the market is expected to be balanced in 2026, despite some media misinterpretations [6]. - Market observers expect the upcoming meeting to confirm the pause in production increases and emphasize a wait-and-see strategy to maintain unity and flexibility amid slowing demand growth and rising supply [8].