Opec+ agrees to gradual production rise: Resend

Clarifies 500,000 b/d rise in January

The Opec+ alliance has agreed to increase its collective crude production by 500,000 b/d in January, with any subsequent rises in output to be discussed at monthly ministerial meetings.

The group will meet monthly in January-March. Any further increases in output beyond January will be capped at 500,000 b/d in each month. The deal is "open" for the whole third phase of the current Opec+ agreement, which runs from January 2021 until April 2022, according to one delegate.

A compensation mechanism, which obliges quota-busters to make up for past overproduction with additional cuts, will continue until March, two delegates said.

Under the third phase of the original agreement struck in April, the alliance had planned to ease production cuts by almost 2mn b/d from January. But a worsening Covid-19 outlook in many regions, coupled with the rapid return of Libyan crude production since September, led the group to consider extending current collective cuts of 7.68mn b/d — largely from October 2018 baselines — into the first quarter of next year. Opec members were largely in favour of this, but faced opposition from the UAE and non-Opec participants Russia and Kazakhstan.

This forced the group to discuss various other options ahead of and during today's meeting, which was postponed by two days to allow for additional talks.

Saudi Arabia will remain co-chair of the group's Joint Ministerial Monitoring Committee (JMMC) alongside Russia, despite earlier this week floating the possibility of stepping down.

By Rowena Edwards, Nader Itayim and Ruxandra Iordache