BMI Believes OPEC Will Remain Responsive to Price Shifts

In a BMI report sent to Rigzone by the Fitch Group recently, BMI analysts said they believe OPEC+ “will remain responsive to shifts in the oil price”.

“The group is in the process of returning a 1.65 million barrel per day tranche of cuts to the market, beginning with a 137,000 barrel per day increase in October,” the analysts said in the report, which is dated October 3, two days before OPEC+’s latest meeting on October 5.

“Several producers will bump up against capacity constraints and this, coupled with adherence to pledged compensation cuts, will help to restrain growth over the coming quarters,” they added.

“Nevertheless, should the group choose to unwind the cuts in full next year, it can comfortably raise supply by 1.45 million barrels per day by December 2026 … Crucially, though, we believe that the group will remain responsive to shifts in the oil price, tempering supply growth if necessary to prop up Brent,” they continued.

“This is a core tenet of our above-consensus forecast next year and, consequently, a source of considerable risk to the outlook,” the BMI analysts went on to state.

In its report, BMI projected that the Brent oil price will average $68 per barrel in 2025, $67 per barrel in 2026, and $70 per barrel in 2027, 2028, and 2029. A Bloomberg consensus included in the report projected that the commodity will come in at $68 per barrel this year, $63 per barrel next year, $68 per barrel in 2027, $70 per barrel in 2028, and $69 per barrel in 2029. BMI is a contributor to the Bloomberg consensus, BMI highlighted in the report.

Latest OPEC+ Meeting

In the BMI report, BMI analysts said, in their view, “the most likely outcome from the [October 5 OPEC+] meeting is either a small production hike (in the range of 137,000 barrels per day) or a pause”.

A statement posted on OPEC’s website on Sunday revealed that Saudi Arabia, Russia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, and Oman “decided to implement a production adjustment of 137,000 barrels per day” in a virtual meeting held on October 5. The statement highlighted that this adjustment will be implemented in November. 

“With Brent trading around the mid-60s, OPEC+ has room to moderately raise its output,” BMI analysts noted in their report.

“As prices decline, we expect the group to rein in its supply, leaving scope for limited market interventions in response to significant and sustained weakness in oil,” they added.

“Some media sources have suggested that OPEC+ could raise production by up to 500,000 barrels per day next month. Although the OPEC Secretariat has refuted this claim, a larger than anticipated hike would lead us to review our outlook on OPEC+ policy,” they continued.

‘Path of Least Pain’

In a note sent to Rigzone by the Sparta Commodities team on Monday, Neil Crosby, Oil Analytics AVP at Sparta, pointed out that “the weekend saw OPEC+ ‘surprise’ the market with some 130,000 barrels per day of production hikes on paper for November”.

“Apparently, this is a bullish signal for the market today, but I find it odd that something much bigger (for example the rumored/leaked/denied plan for three tranches of 500,000 barrels per day) were thought plausible in the first place, other than in the context of ‘a full-scale market share war’,” he added.

“On that topic, I think OPEC and partners are not ready or willing yet and remain on the path of least pain for price and ultimately their budget, whilst also keeping up the optics and messaging around market share,” Crosby continued.

Crosby went on to state in the report that “paper targets are still edging up, projecting confidence, while official releases continue apace on the topic of compensation plans, including a massive one for Kazakhstan that has a low chance of realization”.

“Meanwhile, actual OPEC exports, including oil products, are still in the hands of the key producers and have no official target,” he added.

HSBC, Morningstar

In a note sent to Rigzone by the HSBC team on Monday, which focused on the latest OPEC+ meeting, Kim Fustier, HSBC Senior Global Oil and Gas Analyst, said, “this is the first time this year that rumours/leaks about larger production hikes have not turned out to be true”.

“It may signal some caution within OPEC+ on the strength of global oil demand, particularly as it drops seasonally after summer,” Fustier added in the note.

The HSBC analyst pointed out in the note that OPEC+’s latest decision was “in line” with HSBC’s “assumption of 11 similar monthly increases from November 2025 to September 2026”.

Fustier stated in the note that HSBC’s fourth quarter 2025/2026 Brent assumption remains $65 per barrel, “with downside risks if inventory increases materialize in the OECD”.

In a report sent to Rigzone by the Morningstar team on Monday, Morningstar analysts said, “global trade barriers combined with gradually increasing supply from OPEC+ and the Americas will continue to weigh on the oil price in the near term”.

The analysts highlighted in the report that they were increasing their 2025 WTI oil price forecast to $65 per barrel from $60 per barrel “to reflect actual year to date prices” but noted that there was no change to their 2026 forecast of $60 per barrel.

Rigzone has contacted OPEC for comment on the BMI and Morningstar reports and the Sparta Commodities and HSBC notes. Rigzone has also contacted the Minister of Energy of the Republic of Kazakhstan for comment on the Sparta note. At the time of writing, none of the above have responded to Rigzone.

To contact the author, email andreas.exarheas@rigzone.com