OPEC+ principle agrees: substantial increase in production again in September.

OPEC+ has tentatively agreed to significantly increase oil production again in September, completing the full restoration of the 2.2 million barrel per day production cut measures that were previously suspended. This signals a shift in the organization's strategic focus towards reclaiming global market share, but it could also exacerbate oversupply in the global market later this year. On August 3, according to media reports, an OPEC representative revealed that Saudi Arabia and its partner countries plan to officially approve a production increase of 548,000 barrels per day at a video conference scheduled for Sunday. This increase will fully restore the 2.2 million barrel per day production cut quota agreed upon by eight member countries in 2023, including additional quotas being phased in by the United Arab Emirates. OPEC+ had already preliminarily agreed to complete the restoration of this 2.2 million barrel per day supply volume at last month's meeting. The focus for traders now may shift to the next phase of production cut quotas. "With the expected end of the 2.2 million barrels per day voluntary production cut plan, we anticipate oil-producing countries to hit the pause button while assessing market conditions and broader macro factors," said Helima Croft, Head of Commodity Strategy at RBC Capital LLC. Currently, OPEC+ has another 1.66 million barrels per day production cut plan in place, officially scheduled to continue until the end of 2026, which will be the focus of future market attention. From price defense to market share competition OPEC+'s strategic shift began in early April this year, when the alliance suddenly announced an acceleration of its production cut reversal plan, leading to a sharp drop in oil prices to a four-year low. Since then, OPEC+ has implemented a series of significant monthly production increases, further accelerating the pace in July. With summer demand strengthening, crude oil prices have regained some lost ground. Last Friday, London Brent crude futures traded slightly below $70 per barrel, but have still fallen by 6.7% since the beginning of the year. Concerns about future supply and demand balance have not dissipated. Analysts warn that the market could face oversupply pressure later this year, as increased supply combines with the drag on demand from global growth slowdown to create a compounding effect. Text reprinted from "Wall Street Perspective", author: Ye Zhen; GMTEight Editor: Yan Wencai.