OPEC+ contemplates production boost as oil prices tumble
OPEC+ is considering a significant increase in oil production by 411,000 barrels at its June meeting. This marks the third consecutive month the cartel is contemplating increasing supply to maintain its market share.
OPEC+ is engaged in intensive discussions about the potential increase in oil production at the meeting scheduled for 1st June. According to Bloomberg, this decision would represent the third consecutive month the cartel has increased supply.
One of the options being considered is boosting production in July by 411,000 barrels per day, which is three times the initial assumptions and equates to about one per cent of the current OPEC+ production, Bloomberg reports.
This action would aim not only to maintain market share for the largest producers but also to penalise cartel members who do not adhere to the established production limits.
However, some commentators suggest that the cartel's actions are intended to appease President Donald Trump. In conjunction with the start of Trump's trade war in April, OPEC+ unexpectedly decided to increase production.
This affected oil prices, bringing the commodity to its lowest level in four years, close to 60 USD per barrel in London. Futures contracts have since rebounded as the White House rolled back some of its tariffs. Nonetheless, many forecasters now have pessimistic projections for the market this year, Bloomberg assesses.
In the oil market, contracts for the American WTI crude for June are down by 1.6 per cent to 60,58 USD per barrel, while July futures for the popular Brent crude are up by 1.55 per cent to 63,91 USD per barrel.
