At what level will OPEC+ flip to cuts?
That was one of many questions Skandinaviska Enskilda Banken AB (SEB) Chief Commodities Analyst Bjarne Schieldrop requested in a report despatched to Rigzone by the SEB staff on Tuesday, which centered on the OPEC+ group.
“When will OPEC+ flip round to make some cuts? At what (value) level will they select to stabilize the market? As a result of for certain they are going to,” Schieldrop mentioned within the report.
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“Increased oil inventories, some extra shedding of drilling rigs in U.S. shale, and Brent into the 50ies someplace might be the place the group will step in,” he added.
“There’s nothing we’ve seen from the group to date which signifies that they are going to shut their eyes, let the world drown in oil and the oil value crash to $40 per barrel or under,” Schieldrop continued.
The SEB analyst went on to notice within the report that the message from the group, so far as SEB manages to interpret it, is twofold.
“One, taking again market share which requires a lower cost for non-OPEC+ to again off a bit. And two, oil market stability and stability,” he mentioned.
“It isn’t nearly [point] one. Thus, fretting about how we’re all going to drown in oil in 2026 is completely off the mark by simply specializing in level one,” he added.
An announcement posted on OPEC’s web site on Sunday revealed that Saudi Arabia, Russia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, and Oman “determined to implement a manufacturing adjustment of 137,000 barrels per day” in a digital assembly held on October 5. The assertion highlighted that this adjustment might be carried out in November.
Within the SEB report, Schieldrop identified that “the rebound we now have gotten submit the message from OPEC+ over the weekend is to a big diploma a rebound alongside the curve reasonably than a lot strengthening on the front-end of the curve”.
“That a part of the curve construction is sort of as weak because it was final Thursday,” he added.
Schieldrop additionally said within the report that we’re nonetheless on a weakening path.
“The message from OPEC+ over the weekend was we’re nonetheless on a weakening path with rising provide from the group,” he mentioned.
“It’s simply not as quickly weakening as was feared forward of the weekend when a quota hike of 500,000 barrels per day per thirty days for November was mentioned,” he added.
Shieldrop famous within the report that the Brent curve is on its approach to full contango with Brent dipping into the $50ies per barrel.
“Thus, the continuing weakening we’ve had within the crude curve for the reason that begin of the 12 months, and particularly since early June, will proceed till the Brent crude oil ahead curve is in full contango together with visibly rising U.S. and OECD oil inventories,” he warned.
“The front-month Brent contract will then flip down in direction of the $60 per barrel line and under into the $50ies per barrel,” Schieldrop added.
Rigzone has contacted OPEC for touch upon the SEB report. On the time of writing, OPEC has not responded to Rigzone.
The assertion posted on OPEC’s web site on Sunday mentioned, “the eight OPEC+ nations, which beforehand introduced extra voluntary changes in April and November 2023, particularly Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met nearly on 5 October 2025, to overview world market circumstances and outlook”.
“In view of a gentle world financial outlook and present wholesome market fundamentals, as mirrored within the low oil inventories, the eight collaborating nations determined to implement a manufacturing adjustment of 137,000 barrels per day from the 1.65 million barrels per day extra voluntary changes introduced in April 2023,” it added.
In accordance with a desk accompanying the assertion, Saudi Arabia and Russia’s adjustment quantities to 41,000 barrels per day, every. Iraq’s involves 18,000 barrels per day, the UAE’s is 12,000 barrels per day, Kuwait’s is 10,000 barrels per day, Kazakhstan’s is 7,000 barrels per day, Algeria’s is 4,000 barrels per day, and Oman’s is 4,000 barrels per day, the desk outlined.
The desk highlighted that November 2025 “required manufacturing” is 10.061 million barrels per day for Saudi Arabia, 9.532 million barrels per day for Russia, 4.255 million barrels per day for Iraq, 3.399 million barrels per day for the UAE, 2.569 million barrels per day for Kuwait, 1.563 million barrels per day for Kazakhstan, 967,000 barrels per day for Algeria, and 808,000 barrels per day for Oman.
“The 1.65 million barrels per day could also be returned partially or in full topic to evolving market circumstances and in a gradual method,” the OPEC assertion mentioned.
“The nations will proceed to intently monitor and assess market circumstances, and of their steady efforts to assist market stability, they reaffirmed the significance of adopting a cautious method and retaining full flexibility to pause or reverse the extra voluntary manufacturing changes, together with the beforehand carried out voluntary changes of the two.2 million barrels per day introduced in November 2023,” it added.
“The eight OPEC+ nations additionally famous that this measure will present a chance for the collaborating nations to speed up their compensation. The eight nations reiterated their collective dedication to attain full conformity with the Declaration of Cooperation, together with the extra voluntary manufacturing changes that might be monitored by the Joint Ministerial Monitoring Committee,” it continued.
“In addition they confirmed their intention to completely compensate for any overproduced quantity since January 2024,” it went on to state.
The OPEC assertion additionally highlighted that the eight OPEC+ nations will maintain month-to-month conferences “to overview market circumstances, conformity, and compensation”. It added that the eight nations will meet once more on November 2.
To contact the creator, e mail andreas.exarheas@rigzone.com
