Latest news with #OPECPlus
Zawya
5 hours ago
- Business
- Zawya
OPEC+ oil producers stick to their guns with another big hike for July
LONDON/MOSCOW - The world's largest group of oil producers, OPEC+, stuck to its guns on Saturday with another big increase of 411,000 barrels per day for July as it looks to wrestle back market share and punish over-producers. Having spent years curbing production - more than 5 million barrels a day (bpd) or 5% of world demand - eight OPEC+ countries made an modest output increase in April before tripling it for May, June and now July. They are spurring production despite the extra supply weighing on crude prices as group leaders Saudi Arabia and Russia seek to win back market share as well as punish over-producing allies such as Iraq and Kazakhstan. "Today's decision only goes to show that market share is on top of the agenda. If price will not get you the revenues you want, they are hoping that volume will," said analyst Harry Tchilinguirian of Onyx Captal Group. The eight countries held an online meeting on Saturday to set July production. They also discussed other options, an OPEC+ delegate said. On Friday, sources familiar with OPEC+ talks had said they could discuss an even larger hike. In a statement OPEC+ cited a "steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories" as its reasoning for the July increase. OPEC+ pumps about half of the world's oil and includes OPEC members and allies such as Russia. Its increased supply is weighing on crude prices, squeezing all producers, but some more than others, including a key group of rivals - U.S. shale producers, analysts say. "Three strikes from OPEC+, and none were softballs. May warned, June confirmed, and July fires a shot across the bow," said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official. Since April, the OPEC+ eight have now made or announced increases totalling 1.37 million bpd, or 62% of the 2.2 million bpd they aim to add back to the market. Higher summer oil demand favours increasing output at this time, OPEC+ officials including Russian Deputy Prime Minister Alexander Novak have said. "The oil market remains tight indicating it can absorb additional barrels, as the effective increase should be smaller as several of the eight countries are overproducing, and demand is seasonally rising," said Giovanni Staunovo, analyst at UBS. Algeria was among a small number of nations that requested a pause in the output hikes on Saturday, a source familiar with the matter said. Oil prices fell to a four-year low in April, slipping below $60 per barrel after OPEC+ said it was tripling its output hike in May and as U.S. President Donald Trump's tariffs raised concerns about global economic weakness. Prices closed just below $63 on Friday. Global oil demand is expected to grow by an average of 775,000 bpd in 2025, according to a Reuters poll of analysts published on Friday, while the International Energy Agency in its latest outlook saw an increase of 740,000 bpd. Besides the 2.2 million bpd cut that the eight members started to unwind in April, OPEC+ has two other layers of cuts that are expected to remain in place until the end of 2026. (Reporting by Alex Lawler, Ahmad Ghaddar, Olesya Astakhova, Maha El Dahan and Yousef Saba; editing by Jason Neely)
Forbes
7 hours ago
- Business
- Forbes
OPEC+ Ups The Ante Via Another 411,000 Barrels Per Day Oil Output Hike
The logo of the Organization of Petroleum Exporting Countries (OPEC) is seen at its headquarters in ... More Vienna, Austria. (Photo: Joe Klamar) Oil producers' group OPEC+ decided to up its production levels despite weak crude prices in what is being seen as a bid to hold on to its market share in a tough economic environment. At their meeting on Saturday, eight members of OPEC+, a select group of Russia-led oil producers and the Organization of the Petroleum Exporting Countries (OPEC) spearheaded by Saudi Arabia, opted to raise collective production levels for July by another 411,000 barrels per day. Producers Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman cited 'healthy market fundamentals and low oil inventories' as their reasons behind the move indicating their belief that the global oil market can absorb the additional supply. The decision over the weekend was third consecutive output hike announced by OPEC+. Earlier in May, it agreed to up oil production for a second consecutive month, raising output for June by a similar 411,000 bpd level. The June hike by OPEC+ took the total combined production increases for April, May and June to 960,000 bpd, or 44% of the 2.2 million bpd of previously agreed cuts since 2022. The latest hike implies a higher unwinding of over 1.37 million bpd (or 62%). In a statement, OPEC+ also noted: 'The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability.' The group is scheduled to meet on July 6 to decide on its production levels for August, the week of OPEC's International Seminar - an event it organizes every two years to draw in major industry players. Barring a considerable deteriorating in the macroeconomic climate, another production hike appears to be on the horizon next month as well. The move is a clear bid for a greater market share at the expense of non-OPEC producers, especially U.S. light sweet crude suppliers. Investment banks and other forecasters are scrambling to lower their oil price forecasts while the International Energy Agency is forecasting a market surplus. But there is another strategic reason behind the move by OPEC+ heavyweight and de facto leader Saudi Arabia - that of disciplining errant overproducing fellow members alongside non-OPEC competitors. They include the likes of Iraq and Kazakhstan, which have repeatedly exceeded their oil production quotas. For instance, the latter exceeded its March target by 422,000 bpd. As a result, squeezed profit margins beckon for the entire oil industry if prices remain low. That is the likely expectation on Wall Street courtesy of higher production from OPEC+ as well as non-OPEC producers like the U.S., Brazil, Canada and Guyana. And despite a claim by OPEC+ of falling inventories, latest data on oil storage is sending bearish market signals. According to the IEA, global inventories continue to remain elevated. In its market assessment published on May 15, it said inventories rose for a second consecutive month to 7.7 billion barrels in March. While the said figure may be below the five-year average, a change in sentiment appears to be pretty clear. For the IEA currently expects oil inventories to rise by an average of 720,000 bpd this year, and by 930,000 bpd in 2026. If this drags OPEC+ producers and their competitors toward a full-blown glut, another tussle for market share at low prices beckons.
Reuters
8 hours ago
- Business
- Reuters
Goldman Sachs sees OPEC+ raising oil output by 0.41 mb/d in August
June 2 (Reuters) - Goldman Sachs anticipates the eight country OPEC+ oil group will implement a final 0.41 million barrels per day (mb/d) production increase in August, the bank said in a note dated Sunday. "Relatively tight spot oil fundamentals, beats in hard global activity data, and seasonal summer support to oil demand suggest that the expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6th," Goldman Sachs said in a note. OPEC+, the world's largest group of oil producers, stuck to its guns on Saturday with another big increase of 411,000 barrels per day for July as it looks to wrestle back market share and punish over-producers. The decision likely reflects relatively tight spot fundamentals, a resilient global economy, and an ongoing shift toward a long-term equilibrium aimed at normalizing spare capacity, supporting internal cohesion, and disciplining U.S. shale production, Goldman Sachs noted. Oil prices rebounded more than $1 a barrel in early Asian trade on Monday after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, in line with market expectation. Goldman Sachs expects OPEC+ to maintain flat production levels from September, citing slowing global growth in third quarter and new large-scale non-OPEC projects ramping up. Goldman maintained its cautious oil price forecast, projecting Brent crude to average $60 per barrel and West Texas Intermediate (WTI) $56 per barrel for the remainder of 2025. For 2026, it sees Brent at $56 and WTI at $52 per barrel. The forecast reflects expected supply growth outside of U.S. shale will drive surpluses of 1 mbpd in 2025 and 1.5 mbpd in 2026. The bank mainted its oil price forecast stating a moderate upgrade to demand offsets the increase in OPEC+ supply. Goldman Sachs further cited an upward revision of historical International Energy Agency (IEA) Africa demand estimates, stronger-than-expected European demand data, and a softer electric vehicle (EV) outlook in Western markets as contributing factors.
Bloomberg
9 hours ago
- Business
- Bloomberg
Saudi Arabia Tightens Grip on OPEC+ by Pushing Through Oil Surge
When Prince Abdulaziz bin Salman was appointed Saudi Arabia's energy minister six years ago, he vowed to heed even the smallest of OPEC+ nations. But at the cartel's meeting this weekend, even the most powerful members couldn't block Riyadh's designs. The kingdom steered the group to agree the third super-sized monthly output hike in a row, despite dissent from a faction led by Russia. The Saudis are doubling down on a historic shift, driving oil prices lower as they seek to punish the alliance's quota cheats and reclaim their share of global markets.
Bloomberg
10 hours ago
- Business
- Bloomberg
Oil Advances as OPEC+ Supply Boost Vies With Geopolitical Risk
By Updated on Save Oil gained as a third straight production increase by OPEC+ vied with heightened geopolitical risk in Ukraine and Iran. Brent crude for August rose as much as 2.1% to $64.09 a barrel, after losing 2.2% last week, while West Texas Intermediate was below $62. The Organization of the Petroleum Exporting Countries and its allies agreed on Saturday to add 411,000 barrels a day of supply in July, according to a statement.
