Markets Thirsty for More Oil, OPEC+ 7 Oil Majors Say

Output increases from oil producer group OPEC+ are not leading to higher inventories, showing that markets are thirsty for more oil, ministers and executives from OPEC nations and bosses of Western oil majors have said.

OPEC+, which pumps about half of the world's oil, has been curtailing production for several years to support the market. But it has reversed course this year to regain market share and as U.S. President Donald Trump demanded the group pump more to help keep a lid on gasoline prices.

OPEC+, comprising the Organisation of the Petroleum Exporting Countries and allies such as Russia, began to unwind cuts of 2.17 million barrels per day in April with a production boost of 138,000 bpd. Hikes of 411,000 bpd followed each month in May, June and July.

On Saturday, the group approved a 548,000-bpd jump for August and will likely approve a large hike for September when it meets again in August, sources told Reuters.

"You can see that even with the increases for several months we haven’t seen a major buildup in inventories, which means the market needed those barrels," United Arab Emirates' Energy Minister Suhail al-Mazrouei told reporters.

Mazrouei was speaking on the sidelines of a biennial OPEC seminar, which brings together top oil ministers and executives.

OPEC has withheld access to the seminar to reporters from Reuters and several other news organisations. OPEC declined to comment on why it was doing this.

Global oil demand will increase by about 1.2-1.3 million bpd for the rest of this year, despite challenges from U.S. tariffs and trade tensions, Amin Nasser, the CEO of Saudi oil giant Aramco, told the seminar, according to participants.

Nasser cited rising U.S. gasoline demand and China's petrochemical sector as growth drivers.

Chinese and Japanese buyers are requesting more oil in a further indication of strong demand, Shaikh Nawaf Al-Sabah, the CEO of Kuwait Petroleum Corporation told the seminar, according to participants.

OPEC has ramped up production partly because it wants to regain market share from rivals such as the United States, sources have told Reuters.

BP CEO Murray Auchincloss said he saw non-OPEC production stagnating next year after hitting new highs in recent months.

The physical oil market looks tight and China is boosting stockpiles, Auchincloss said, according to participants.

Shell CEO Wael Sawan said he was more concerned about oil field depletion rates of 4-5% a year, meaning more investments were needed, according to participants.

TotalEnergies CEO Patrick Pouyanne said he thought the market was rather well supplied given that demand growth has halved in China in recent years, according to participants.

With planned output rises, OPEC+ will likely complete the return to the market of the 2.17 million bpd of voluntary cuts in September. It is also allowing the UAE to complete a 300,000 bpd separate output increase.

OPEC+ still has separate cuts of 3.65 million bpd in place, consisting of 1.65 million bpd in voluntary cuts by eight members and 2 million bpd across all members. Those cuts expire at the end of 2026.