OPEC+ sticks to plan for gradual output hike, oil price roars higher

A self-elevating drilling platform, or jack-up drill rig, is seen at a shipyard of Cosco (Nantong) Shipyard Co., Ltd before being delivered to China Oilfield Services Limited (COSL) on July 13, 2021 in Qidong, Nantong City, Jiangsu Province of China.
Xu Congjun | Visual China Group | Getty Images

OPEC+ agreed on Monday to stick to an existing pact to hike oil output by 400,000 barrels per day (bpd) in November, despite consumer calls for more crude and surging prices that threaten an economic recovery from the pandemic.

Brent crude advanced $1.98, or 2.5%, to settle at $81.26 per barrel. West Texas Intermediate crude futures gained $1.74, or 2.29%, to end the day at $77.62 per barrel.

The Organization of the Petroleum Exporting Countries, Russia and allies, known as OPEC+, have been under pressure from big consumers, such as the United States and India, to add extra supplies after oil prices climbed 50% this year.

OPEC+ ministers "reconfirmed the production adjustment plan" previously agreed for adding 400,000 bpd in November, the group said in a statement issued after their online ministerial talks.

Brent crude roared above $81 a barrel on the news that the group would not adjust its plan, sending prices back to three-year highs and adding to inflationary pressures in the global economy. "There are calls for more of a production increase by OPEC+," an OPEC+ source had told Reuters ahead of Monday's ministerial talks. "We are scared of the fourth wave of corona, no one wants to make any big moves."

The group had agreed in July to boost output by 400,000 bpd a month until at least April 2022 to phase out 5.8 million bpd of existing production cuts, already much reduced from curbs that were in place during the worst of the pandemic.

A senior aide to U.S. President Joe Biden met Saudi Crown Prince Mohammed bin Salman in Saudi Arabia on a range of issues last week, saying oil was "of concern". India, another big oil consumer, has pushed for more supply.