Opec+ members agree to delay output increase: Update

Adds details from Opec statement

Opec+ members have agreed to delay a plan to start increasing output by two months, following a virtual meeting today.

Eight members of the group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — are now scheduled to start unwinding 2.2mn b/d of "voluntary" crude production cuts from December over a 12-month period, the Opec Secretariat said in a statement. They previously planned to start unwinding in October.

The return of these barrels is still not a foregone conclusion. The eight members retain the "flexibility to pause or reverse the adjustments as necessary", the secretariat said. If they go ahead with their updated plan, their collective output targets will rise by around 180,000 b/d in December.

The delay to the output increase follows a steep fall in oil prices in recent days after worse-than-expected economic data in China and the US, and despite an ongoing oil blockade in Libya. The Opec statement did not specify the reason for the decision, nor did it make any note of market fundamentals.

The secretariat did, however, highlight assurances by Iraq and Kazakhstan to compensate for producing above their output targets since the start of the year. Both countries have "committed to adjust compensation plans for any over produced volumes in August", Opec said.

By Aydin Calik, Nader Itayim and Bachar Halabi