Oil prices decline following unexpected OPEC+ output hike

Oil prices extended their decline on Friday following OPEC+'s announcement of its Thursday meeting outcomes. Eight alliance members agreed to accelerate their phase-out of production cuts in effect since 2022, approving a 411,000 barrel per day output increase for May, according to Reuters.

As the agency reports, OPEC+ had initially planned a 135,000 barrel per day production hike. The organization clarified that the revised output increase incorporates both the originally scheduled May increment and two additional monthly supply boosts. However, the alliance noted these adjustments remain subject to review should market conditions change.

Alongside the production increase, the organization will maintain its existing output cuts of 3.65 million barrels per day through the end of next year to stabilize markets. Combined with additional voluntary reductions, the group is cutting crude oil production by a total of 5.85 million barrels per day, representing 5.7% of global supply.

Reuters noted that OPEC's decision underscores the alliance's push for stricter compliance with production quotas. This move will pressure underperforming members to improve their adherence to the agreed output targets.