OPEC+ sets sights on more oil production hikes in July — Bloomberg

Bloomberg reports that OPEC+ is eyeing a third consecutive hike in oil production for July. The proposal on the table includes an increase of 411,000 barrels per day, which is three times greater than the initial plan. A front-office decision will be reached during the expert meeting scheduled for June 1.

The cartel plans to address the rising demand for oil with this additional output boost, as noted by the agency. Still, other underlying motivations may also come into play, such as pressure from the United States and the need to exert influence over countries that are not adhering to their production quotas.

Martijn Rats from Morgan Stanley suggests that the market can absorb such a supply hike, despite countries continuing to disregard established quotas. Kazakhstan, for example, has increased its exports to record levels, thus inflaming tensions within OPEC+.

Goldman Sachs says things could change and there might not be more production increases after July. Forecasts from the International Energy Agency (IEA) indicate a slowdown in demand growth during the latter half of the year, making any additional output boosts a potentially risky endeavor.