Latest news with #productionincrease
Zawya
2 days ago
- Business
- Zawya
Oil jumps after OPEC+ sticks to same output hike in July versus June
SINGAPORE - Oil prices rebounded more than $1 a barrel on Monday after producer group OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, which came as a relief to those who expected a bigger increase. Brent crude futures climbed $1.34, or 2.13%, to $64.12 a barrel by 0346 GMT after settling 0.9% lower on Friday. U.S. West Texas Intermediate crude was at $62.31 a barrel, up $1.52, or 2.5%, following a 0.3% decline in the previous session. Both contracts were down more than 1% last week. The Organization of the Petroleum Exporting Countries and their allies decided on Saturday to raise output by 411,000 barrels per day in July, the third month the group known as OPEC+ increased by the same amount, as it looks to wrestle back market share and punish over-producers. The group had been expected to discuss a bigger production hike. "Had they gone through with a surprise larger amount, then Monday's price open would have been pretty ugly indeed," analyst Harry Tchilinguirian of Onyx Capital Group wrote on LinkedIn. Oil traders said the 411,000-bpd output hike had already been priced into Brent and WTI futures. "The headline motive has centred on punishing OPEC+ members like Iraq and Kazakhstan that have persistently produced above their pledged quotas," said the Commonwealth Bank of Australia in a note on Monday. Kazakhstan has informed OPEC that it does not intend to reduce its oil production, according to a Thursday report by Russia's Interfax news agency citing Kazakhstan's deputy energy minister. Looking ahead, Goldman Sachs analysts anticipate OPEC+ will implement a final 0.41 million bpd production increase in August. "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," the bank said in a note dated Sunday. Meanwhile, low levels of U.S. fuel inventories have stoked supply jitters ahead of expectations for an above-average hurricane season, analysts said. "More encouraging was a huge spike in gasoline implied demand going into what's considered the start of the U.S. driving season," ANZ analysts said in a note, adding that the gain of nearly 1 million bpd was the third-highest weekly increase in the last three years. Traders are also closely watching the impact of lower prices on U.S. crude production which hit an all-time high of 13.49 million bpd in March. Last week, the number of operating oil rigs in the U.S. fell for a fifth week, down four to 461, the lowest since November 2021, Baker Hughes said in its weekly report on Friday. (Reporting by Florence Tan and Michele Pek; Editing by Cynthia Osterman, Christian Schmollinger and Lincoln Feast.)
Reuters
4 days ago
- Business
- Reuters
OPEC+ set to discuss July oil output hike, may be larger than 411,000 bpd, sources say
LONDON/MOSCOW, May 31 (Reuters) - OPEC+ meets on Saturday to discuss an increase in oil output for July that may be larger than the 411,000 barrels per day (bpd) increases it made for May and June, sources familiar with OPEC+ talks told Reuters. Eight OPEC+ countries have been raising output more rapidly than earlier planned, even though the extra supply has weighed on prices. The strategy of group leaders Saudi Arabia and Russia is aimed partly at punishing over-producing allies and to win back market share, Reuters has reported. The eight members, set to meet online at 0900 GMT, could discuss an increase larger than 411,000 bpd for July, two sources familiar with OPEC+ talks and two OPEC+ delegates said. They could also keep the hike at 411,000 bpd, other sources said. All sources declined to be identified by name due to the sensitivity of the matter. OPEC and authorities in Russia and Saudi Arabia did not respond to requests for comment sent on Friday. Kazakhstan's statement on Thursday that it won't cut production has sparked debate in OPEC+, some of the sources said on Friday, with one saying that this factor may tilt discussions towards a larger output hike on Saturday. While eight leading OPEC+ members are increasing supply, some of those are being asked to temper those increases to compensate for producing more than their monthly quotas. Kazakhstan's statement suggested it may not do so. "Kazakhstan's repeated public displays of production defiance do raise the risk of an even bigger output increase," said Helima Croft of RBC Capital Markets, adding that she still saw a 411,000 bpd hike for July as likely. Kazakhstan has been pumping far above its OPEC+ target, a factor that has angered other OPEC+ members and helped prompt the group to proceed with plans to hike output beginning in April, sources said at the time. United Arab Emirates Energy Minister Suhail Mohamed Al Mazrouei, asked on Tuesday about the output plan for July, said OPEC+ was doing its best to balance the oil market. 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. OPEC+ includes OPEC members and allies such as Russia. Output increases that began in April are aimed at unwinding some 2.2 million bpd of voluntary output cuts by eight leading member states.
Arab News
23-05-2025
- Business
- Arab News
Oil Updates — crude heads to first weekly loss since April on OPEC+ supply hike prospect
SINGAPORE: Oil prices dropped for a fourth consecutive session on Friday and were set for their first weekly decline in three weeks, weighed down by renewed supply pressure from another possible OPEC+ output hike in July. Brent futures fell 31 cents, or 0.5 percent, to $64.13 a barrel by 7:12 a.m. Saudi time. US West Texas Intermediate crude futures lost 33 cents, or 0.5 percent, to $60.87. For the week, Brent has fallen 1.9 percent, and WTI has dropped 2.5 percent, following two weeks of gains. Both contracts touched their lowest in more than one week on Thursday after a Bloomberg News report that OPEC+ was considering another large production increase at a meeting on June 1. Increasing output by 411,000 barrels a day (bpd) for July was among the options discussed, but no final agreement has yet been reached, the report said, citing delegates. 'The oil market is under renewed pressure as noise builds around what OPEC+ will do with their July output levels,' ING analysts wrote in a research note. They expect that OPEC+ will go ahead with a 411,000 bpd supply increase for July and currently forecast Brent to average $59 per barrel in the fourth quarter. OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to increase production by nearly 1 million barrels per day in April, May and June. The supply tailwind offset jitters earlier this week triggered by a report saying Israel is making preparations to strike Iranian nuclear facilities and new sanctions announced by the EU and Britain on Russia's oil trade. A large crude oil build in the US also weighed on oil prices. As traders brace for a flood of increased supply in coming months from OPEC+, US crude oil storage demand has surged in recent weeks to levels similar to the COVID-19 pandemic, according to data from storage broker The Tank Tiger. On Friday, the market will watch for US oil and gas rig count data from Baker Hughes that is used as an indicator for future supply. The market is also closely watching US-Iranian nuclear negotiations which could determine the future supply of Iranian oil. The fifth round of talks will take place in Rome on Friday.
Bloomberg
22-05-2025
- Business
- Bloomberg
Oil Extends Decline as OPEC+ Considers Another Output Surge
Oil declined for a third day with OPEC+ members discussing another super-sized production increase for July, just as demand faces headwinds from the US-led trade war. Brent traded near $64 a barrel, touching the lowest in a week. If OPEC+ approves the potential increase of 411,000 barrels a day when it meets on June 1, it will mark the third month in a row the cartel has agreed to boost supplies by triple the initially scheduled amount.
Globe and Mail
22-05-2025
- Business
- Globe and Mail
Oil prices fall more than 1% on potential further increase to OPEC+ output
Oil prices dropped by more than 1 per cent on Thursday after a report that OPEC+ is discussing a production increase for July, stoking concerns that global supply could exceed demand growth. Brent futures lost $1.05, or 1.6 per cent, to $63.86 a barrel by 1036 GMT. U.S. West Texas Intermediate crude was down 98 cents, or 1.6 per cent, at $60.59. The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, are discussing whether to make another large output increase at their meeting on June 1, Bloomberg News reported. An increase of 411,000 barrels per day (bpd) for July is among the options under discussion, though no final agreement has been reached, the report said, citing delegates. Reuters previously reported that that the group planned to accelerate output increases and could bring back as much as 2.2 million bpd by November. OPEC+ has been in the process of unwinding production cuts, with additions to the market in May and June. 'We're seeing the market reacting to evidence that OPEC is letting go of a strategy to defend price in favor of market share,' said Harry Tchiliguirian at Onyx Capital Group. 'It's a bit like taking off a Band-Aid; you do it in one fell swoop.' In a note on Wednesday, RBC Capital analyst Helima Croft said that a 411,000 bpd increase from July is the 'most likely outcome' from the meeting, primarily from Saudi Arabia. 'A key question will be whether the voluntary cut will be fully drawn down before the leaves turn brown in many parts of the world, in line with the original taper schedule,' she said. Prices were already lower in the session after Energy Information Administration data released on Wednesday showed U.S. crude and fuel inventories showed surprise stock builds last week as crude imports hit a six-week high and gasoline and distillate demand slipped. Crude inventories rose by 1.3 million barrels to 443.2 million barrels in the week ended May 16, the EIA said. Analysts in a Reuters poll had expected a drawdown of 1.3 million barrels. The EIA's surprise stock builds will exert downward pressure on prices, particularly on WTI, said Emril Jamil at LSEG Oil Research, adding that this could further encourage more U.S. exports to Europe and Asia. While OPEC+ deliberates, a rising yield on 10-year U.S. Treasury bonds suggests that the producer group could be increasing oil supply into a market with lower demand.
