OPEC has agreed to raise its output ceiling to 31.5 million barrels per day at a meeting on Friday, OPEC sources said in what appeared to be an effective acknowledgment of existing production, Reuters reported.
It was not immediately clear if the new ceiling included rejoining member Indonesia or not.
According to Bloomberg the increase is from a previous output target of 30 million barrels and does not include production from Indonesia, which joined the producer group after a break of almost seven years, according to a delegate with knowledge of the matter, who asked not to be identified because the decision hasn't been made public. OPEC pumped about 31.4 million barrels a day of crude in October, according to estimates in its monthly market report.
The Organization of Petroleum Exporting Countries sent crude prices reeling a year ago when it decided to maintain output, continuing to pump into an oversupplied market as it sought to force higher-cost producers to scale back their operations. Saudi Arabia, the group's biggest producer and architect of the current policy, has remained opposed to a cut in production unless countries outside the group cooperate. The group has pumped more than its collective target of 30 million barrels a day the past 18 months, data compiled by Bloomberg show.
Crude slumped about 38 percent in the last year, with global benchmark Brent crude headed for its lowest annual average in a decade after reaching a six-year low of $42.23 on Aug. 24. Brent fell 2.1 percent to $42.91 a barrel at 2:19 p.m. London time Thursday, while West Texas Intermediate crude dropped 2.9 percent to $39.90.
OPEC's policy is squeezing incomes for its members, whose combined annual revenue could fall to $550 billion from an average of more than $1 trillion in the past five years, the International Energy Agency said Nov. 10.
"The OPEC member countries have lost so much money," Iranian Oil Minister Bijan Namdar Zanganeh said Thursday in the Austrian capital.
Venezuela, whose foreign currency reserves are at the lowest level in 12 years, led calls for a reduction in output, supported by Ecuador. Iran is poised to boost output after sanctions over its nuclear program are lifted and it won't seek permission from OPEC to do so, Zanganeh said last month. OPEC requires consensus among members to alter its output ceiling.
Global oil stockpiles have risen to record levels as Saudi Arabia, Russia and Iraq boosted supply, the IEA said on Nov. 13. The market is oversupplied by as much as 2 million barrels a day, Zanganeh said this week, equivalent to about 2 percent of global output.