Opec+ agreed to increase oil production for the third month in a row despite the reservations of the main member of Russia, which increases the transformation of the historical policy that led to the sinking of crude prices.
The oil producing countries led by the Kingdom of Saudi Arabia agreed during a video conference on Saturday to add 411,000 barrels per day to the market in July, according to a statement on the group’s website. The scheduled height matches increaseMay and JuneOn the occasion of a fundamental reflection of the defending prices to pushing it actively.
“OPEC+ is whispering,” said Jorge Leon, an analyst at Rystad Energy A/S, who previously worked in OPEC. “May hinted, June spoke clearly, and July came with loudspeakers.”
Officials say that the increase in the supply reflects the desire of the Kingdom of Saudi Arabia to punish members of its excessive production, such as Kazakhstan and Iraq, the share of the lost market in front of American rock hiffs and other competitors, and meets President Donald Trump’s desire for cheaper oil.
It provides relief to consumers with the northern hemisphere entering the peak demand season, with central banks also helped struggle with stubborn inflation. However, the market impact creates financial risks for oil producers around the world, which can face a period of low prices for a long time.
Several members expressed reservations during a Saturday meeting on the speed that OPEC+ was raising production. The delegates said that Russia, Algeria and Oman wanted to stop the increases, and asked not to name the information because the information was private.
The difference in opinions between Moscow and his leadership, the most powerful Kartel, will return to playing on July 6, when they meet again to discuss directing levels for the month of August.
The oil collapsed for a short period of time to a minimum level of four years less than $ 60 a barrel in April after the organization of the oil -exporting countries and their allies announced for the first time that they would boost production by three times the amount scheduled. The move came even with the stumbling of the demand and the Trump’s commercial war was already crushing the market.
While Brent Futures has since recovered for trading near $ 64 a barrel, the International Monetary Fund estimates that Saudis need prices exceeding $ 90 to cover the luxury spending plans for Crown Prince Mohammed bin Salman. The Kingdom is competing with a riseBudgetAnd he had to reduce investment in major projects such as the future city, NEOM.
Giovanni Stonovo, commodity analyst in the commodity, said in the conversation UBS group AG.
If the RIYADH strategy is to discipline the cartel share that is cheating through “controlled sweating”, it does not seem to be working.
Kazakhstan, the most insecure, still exceeds its borders by several hundreds of thousands of barrels per day, and has publicly mentioned it possessesThere are no plans to atone. Energy Minister Yerlan Akinsinov told reporters on Thursday that the country cannot impose cuts on international companies’ partners, or to contact the state -run fields.
However, the shrinkage abandons the heart of shale oil in America, where companies love DiamondBack Energy A company saysProduction reached its climaxDespite Trump’s promise that the country “Exercise, baby, drilling“In a new energy boom.
Summer demand
With a scheduled rise in July, OPEC+ will be slightly over the middle of the road through a road map to revive 2.2 million barrels on the day when production was in recent years – a process that was previously scheduled to continue until late 2026. The group will decide in the coming months the speedy restoration of the remaining attachments that still block it from the market.
For some analysts, the increased supply is completely logical. The demand will increase over the next few months in the United States, where drivers move to the roads to spend summer vacations, as well as in the Middle East, where the use of air conditioning means some barrels at the local level.
Amanta Sen, Director of Research at Energy Association Ltd. said. “It is a suitable time for OPEC+ add barrels to the market, so I don’t see why they did not do so.”
However, there may be other prices in the store. Jpmorgan Chase CO. expects Co. The Brent Futures is drowned in “The Perconsons” later this year as the height of the cartel contributes to the abundance of the global supply of more than two million barrels per day.
This story was originally shown on Fortune.com
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