Surprise decision: OPEC will go ahead with April oil output increase (confirmed)

OPEC+ was expected to delay a planned April oil output increase but is instead going ahead with it, according to a delegate cited by Bloomberg (this is now confirmed by various other reports)

Oil is quickly lower.

OPEC+ is scheduled to boost output by 138,000 bpd in April, which is a small about in the 104m bpd market but the shift signals that OPEC will continue to bring on oil supplies and could be being pushed to pump more by the US administration. The delegate also says the planned hikes beyond April will go ahead.

In total, OPEC is scheduled to slowly bring on 2.2m bpd by December 2026. With this announcement, you have to start pricing in a good chance that’s all coming. Some mitigation may come from compensation cuts for those who over-produced quotas; those will last until June 2026.

The hikes were last delayed for three months at the December meeting but the UAE and others were running out of patience, according to reports.

WTI crude initially fell about 70-cents on the report and has continued lower to fall $1.50 on the day to $68.28. Zooming out on the chart, there is a great deal of support into the mid-60s.

Here is the statement, which confirms the earlier reports but also highlights flexibility based on market conditions.

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman met virtually on March 3, 2025, to review global market conditions and the future outlook.

Taking into account the healthy market fundamentals and the positive market outlook, they re-affirmed their decision agreed upon on December 5, 2024, to proceed with a gradual and flexible return of the 2.2 mbd voluntary adjustments starting on 1st April, 2025, while remaining adaptable to evolving conditions. Accordingly, this gradual increase may be paused or reversed subject to market conditions. This flexibility will allow the group to continue to support oil market stability. Furthermore, the eight countries reiterated their collective commitment to full conformity with the additional voluntary production adjustments as agreed under the 53rd JMMC meeting on April 3, 2024. They also confirmed their intention to fully compensate for any overproduced volumes since January 2024, in accordance with the compensation plans submitted to the OPEC Secretariat, ensuring that all compensations are completed by June 2026.

The countries with overproduced volumes have also agreed to frontload their compensation plans, so that more of the overproduced volumes are compensated in the earlier months of the compensation period, and will submit their updated compensation schedules to the OPEC Secretariat by the 17th of March 2025 which will be posted on the Secretariat’s website.

How low will oil have to get for them to have a change of heart? Sub-$60 WTI? Sub $65 brent?

This article was written by Adam Button at www.forexlive.com.