OPEC+ production increases prevent larger rise in oil prices — BCA Research

Recent developments in trade relations of the world's two leading economies, the United States and China, are positively impacting oil prices. Brent and WTI gained about 4% over the past week ahead of the official talks between the two countries on Sunday, May 11.

However, year-on-year dynamics of oil prices lagged behind last year's performance by about 12%. BCA Research experts attribute the decline to the actions of Saudi Arabia as the OPEC+ leader. Despite the de-escalation of trade tensions between the US and China, the alliance continues to increase oil production, fueling concerns about the imbalance of supply and demand.

Previously, the cartel members planned to give up cuts of 2.2 million barrels per day in 18 months, but now they are ready to do so in 14 months, BCA Research reports. Thus, Saudi Arabia is trying to maintain its position in the commodity market, according to the organization's experts. The country's target oil price has moved to the background for now.