OPEC+ to increase oil production higher with the market share

Analysts expected the coalition to decide another product of 411,000 barrels per day – the same goal approved for May, June and July.

The group said in a statement that “fixed global economic expectations and the basics of the current health market, as shown in low oil stocks,” led to the decision to increase the output.

George Leon told Rystad Energy to Agence France Presse that “OPEC+ remains a surprise to the market – this was the last height greater than expected and sends a clear message, to anyone who is still in doubt: the group is firmly turning towards a market share strategy,” George Leon told AFP.

Two large questions are now suspended on the market: First, once the 2.2 million barrels per day of voluntary discounts are not binding, does OPEC+ target the following layer of 1.66 million barrels? And the second, is there sufficient demand to absorb it?

“With a comfortable price detaining more than $ 60 and turbulent geopolitical rear – especially given the fragile ceasefire in the Middle East, and the broader risks in Ukraine and Libya – the answer to both questions may be” yes. ”

“Kazakhstan and Iraq actually are still exaggerating their higher shares is a worker that supports relaxation decision,” said UBS Steonovo analyst.

The meeting comes after a 12 -day conflict between Iran and Israel, which briefly sent prices to $ 80 a barrel amid concerns about the possible closure of the Hormuz strategic strait, a transition point for about five of the world’s oil supplies.

The Opec+ Ope-OPER-, which includes an organization from 12 countries for oil-exporting countries (OPEC) and its allies-began production cuts in 2022 in an attempt to support prices.

But in a policy attack, eight coalition members led by the Kingdom of Saudi Arabia surprised the markets by announcing that they would significantly do production from May, which led to low oil prices.

Oil prices were about $ 65 to $ 70 a barrel.

By agreeing to another rise in the output, the Kingdom of Saudi Arabia may seek to increase pressure on members to not maintain the agreed shares by reducing the expected oil profits due to low prices.

A grade by Bloomberg showed that coalition production increased by only 200,000 barrels in May, despite the doubling of the shares.