OPEC+ unlikely to ride to the rescue anytime soon

Despite falling short of its targeted increase in output once again in October, we think OPEC+ will continue to snub calls to raise output more rapidly. The week began with comments from the Biden Administration that OPEC+ was imperilling the global economic recovery by sticking to its existing output plan, and that it was considering a release of stocks from its strategic reserve to stem the rise in domestic fuel prices and put pressure on the group to change course. But the reality is that OPEC+ can afford to drag its feet for now. That’s because, whereas in the past when the group would have worried about a loss of market share, other non-OPEC+ producers (most notably in the US) are also struggling to raise output. As a result, we continue to expect oil prices to trend broadly sideways between now and the end of the year.