OPEC has agreed to set a new oil-output ceiling of 31.5 million barrels a day, according to a delegate with knowledge of the decision.
Crude fell as much as 3.2% in New York.
The increase is from a previous ceiling of 30 million barrels and does not include production from Indonesia, which joined the producer group after a break of almost seven years, according to the delegate, who asked not to be identified because the decision hasn’t been made public.
The Organisation of Petroleum Exporting Countries sent crude prices reeling a year ago when it decided to maintain output, continuing to pump into an oversupplied market as it sought to force higher-cost producers to scale back their operations.
Saudi Arabia, the group’s biggest producer and architect of the current policy, has remained opposed to a cut in production unless countries outside the group cooperate.
The group has pumped more than its collective target of 30 million barrels a day the past 18 months.
Crude slumped about 38% in the last year, with global benchmark Brent crude headed for its lowest annual average in a decade after reaching a six-year low of $42.23 on August 24.
Brent fell 2.1% to $42.93 a barrel at 2:06 London time Thursday, while West Texas Intermediate crude dropped 3.1% to $39.81.
OPEC’s policy is squeezing incomes for its members, whose combined annual revenue could fall to $550 billion from an average of more than $1 trillion in the past five years, the International Energy Agency said November 10.
“The OPEC member countries have lost so much money,” Iranian Oil Minister Bijan Namdar Zanganeh said Thursday in the Austrian capital.
Venezuela, whose foreign currency reserves are at the lowest level in 12 years, led calls for a reduction in output, supported by Ecuador. Iran is poised to boost output after sanctions over its nuclear program are lifted and it won’t seek permission from OPEC to do so, Zanganeh said last month. OPEC requires consensus among members to alter its output ceiling.
Global oil stockpiles have risen to record levels as Saudi Arabia, Russia and Iraq boosted supply, the IEA said on November 13.
The market is oversupplied by as much as 2 million barrels a day, Zanganeh said this week, equivalent to about 2% of global output.
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