On May 27, OPEC+ representatives and 24 analysts told reporters that OPEC+ is expected to confirm its May-July plan next week to increase oil production in July by 840,000 barrels per day.
On June 1, OPEC+ ministers will hold a meeting, and the current market is not expected to Surprise, although this year’s decisions surprised both the bulls and the bears.
In May and June, OPEC+ oil production will increase by 350,000 barrels per day, and in July it will increase by 400,000 barrels per day. In addition, Saudi Arabia will gradually reduce its unilateral production cut of 1 million barrels per day in the next few months, and will begin to increase production by 250,000 barrels per day in May and June.
Overall, OPEC+ is expected to increase production by 2.1 million barrels per day by July.
The decision from early April shows OPEC+ leaders believe the market will be able to absorb so much as vaccinations accelerate and people start traveling more supply. OPEC+ and all analysts expect global oil demand to rebound strongly in the second half of 2021, almost reaching pre-crisis levels by the end of the fourth quarter of this year.
Despite the worsening of the epidemic in some of Asia’s major oil importers, such as India and Japan, OPEC+ and forecasters and analysts expect the market to absorb the additional oil production. Even if Iran is able to return to the export market sometime in the second half of the year.
On May 26, Russian Deputy Prime Minister Alexander Novak said that Russia estimates that the current gap in the global oil market is about 1 million barrels per day. Earlier this week, Goldman Sachs still expected oil prices to rise to $80 a barrel by the end of the year, despite the possibility of Iranian oil returning to the market.
Based on the above news, we can see that OPEC+ is expected to reduce production cuts as planned next week, and Iran may return to the market. Although analysts believe that the market can absorb the additional increase in oil, considering that the world is still fighting the new crown epidemic, and the epidemic situation in some countries is even worsening, it is difficult for oil demand to increase significantly. In this case, investors still need to be vigilant Oil prices failed to rise. </p