Reports have emerged that Saudi Arabian officials are now denying news originating from the Wall Street Journal that OPEC is considering a 500,000 barrel-per-day oil production increase.
Earlier on Monday, the WSJ reported that OPEC+ was discussing a potential oil production increase, citing OPEC delegates. That news sent oil prices down by some 4% on the day.
Less than two hours later, Bloomberg reported that Saudi officials had denied they were considering a production hike.
Twitter also lit up, with Energy Intel’s Amena Bakr reiterating comments from Saudi Energy Minister Prince Abdulaziz bin Salman, saying “if there is a need to take further measures by reducing production to balance supply and demand, we always remain ready to intervene.”
Bakr also noted that the Saudi Energy Minister “categorically denies recent reports that Saudi Arabia is discussing with other OPEC producers an output increase of 500 thousand barrels per day.
As of the time of writing on Monday, 12:39 EST, Brent crude was trading down 1.51% at $86.30, while WTI was trading down 1.66% at $78.39 per barrel.
On December 4th, OPEC+ will meet to set out OPEC+’s production plans for January 2023. The timing of the production target increase—if the group agrees to it—would be just one day before the effective date of both the EU’s Russian oil embargo and G7 oil price cap.
A production hike from the group would be a welcome development for the Biden Administration, which has lobbied OPEC members to increase production over the last few months. Despite President Biden’s heavy-handed attempt at persuading the group to produce more, OPEC+’s October meeting ended with the group deciding to cut its oil production targets by 2 million barrels per day in the months of November and December.