Oil markets will easily absorb extra OPEC+ barrels — Standard Chartered

Eight OPEC+ countries will meet on July 6. Standard Chartered analysts expect the members to continue phasing out the 2023 oil production cuts by raising output by 411,000 barrels per day.

Standard Chartered predicts the group will announce one final 411,000 barrel-per-day production increase at its August meeting.

Oil markets will easily absorb extra supply in the short term. Standard Chartered estimates global oil stocks will shrink by 0.9 million barrels per day in the third quarter after growing by 0.2 million barrels per day in the second quarter. Analysts say the July-September inventory draw will be driven by a 1.4 million barrels per day surge in crude demand.

At the same time, non-OPEC+ production will likely remain flat. However, quota violations by countries like Kazakhstan could become a major issue when oil demand growth slows.