6 August
Bank of America warns OPEC+ output hikes will weigh on oil market long-term
The oil market could soon face long-term pressure due to oversupply, according to the Bank of America analysts. They point to OPEC+’s planned production hikes, which threaten to exacerbate an already glutted market.
Alliance members agreed to boost daily crude output by 411,000 barrels in June. However, bank analysts project the actual supply increase will reach just 170,000 barrels due to overproduction by some OPEC+ members and constraints on others.
Nevertheless, the market will remain oversupplied. Bank of America projects Brent will average $62 per barrel this year, down from $80 in the previous year. Analysts caution that prices could temporarily plunge to $50 if trade tensions escalate.
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