#OPEC, allies reportedly agree to boost oil production

The world’s major oil producers have agreed to boost their output by 500,000 barrels a day in January even as the coronavirus pandemic crimps demand, according to reports.

The Organization of Petroleum Exporting Countries and its Russia-led allies — known collectively as OPEC+ — reached the deal Thursday after a disagreement over whether to walk back more of the production cuts imposed earlier this year, The Wall Street Journal reported.

The bloc had been expected to keep its current cuts of 7.7 million barrels a day in place for another three months. But Russia and some other countries expressed interest in hiking production again now that hopes for a COVID-19 vaccine have helped push up oil prices, according to Reuters.

OPEC+ now plans to hold monthly meetings to decide on its output policies beyond January as the group did not find a compromise on longer-term goals for the rest of next year, sources told the news agency.

The oil market has remained under significant pressure from the COVID-19 pandemic despite OPEC+ agreeing to a historic production cut of 9.7 million barrels a day in April. That was reportedly reduced to 7.7 million barrels a day over the summer as prices recovered.

The spring agreement came amid a historic collapse in oil prices sparked by pandemic-related travel restrictions and a price war between Russia and Saudi Arabia that caused a glut of supply.

The International Energy Agency has said the recent surge in COVID-19 cases in the US and Europe will put renewed pressure on the industry. In a forecast last month, the intergovernmental body said it expects oil demand to drop by 8.8 million barrels a day in 2020, up from the 8.4 million-barrel decrease projected in October.

West Texas Intermediate crude oil futures were up about 1 percent at $45.74 a barrel as of 1:07 p.m. Thursday, while Brent crude futures were recently up 1.2 percent at $48.83.