(Reuters) -Goldman Sachs expects OPEC+ to raise oil production quotas by 140,000 barrels per day for November, it said on Tuesday, ahead of the group’s meeting on Sunday.
It said, however, a larger production hike was also plausible, citing factors including an only modest increase in OECD commercial stocks in Europe and Asia. Total inventories remain slightly below year-ago levels and U.S. crude inventories are at an eight-month low.
“Demand from Asia remains solid, and we see downside risks to Russian oil production,” Goldman Sachs added, saying Russia’s output had fallen below levels it previously forecast.
It also pointed to precedent, noting OPEC+ tripled the pace of monthly production increases for the second month of the 2.2 million bpd production cut unwind after the market absorbed its first hike.
OPEC+, which comprises the Organization of the Petroleum Exporting Countries, Russia, and other allied producers, has already raised quotas by over 2.5 million barrels per day since reversing its strategy of output cuts in April.
Eight OPEC+ members are scheduled to meet online on October 5, and are likely to approve a production increase of at least 137,000 bpd, Reuters reported, citing sources familiar with the talks.
(Reporting by Anushree Mukherjee and Anmol Choubey in Bengaluru; editing by Barbara Lewis)
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