OPEC+ Plans to Increase Oil Production Again, Warns Commerzbank
OPEC+ is set to raise oil production by 411 thousand barrels per day in August, marking the fourth increase since April. This move may lead to oversupply once summer demand weakens, potentially causing oil prices to drop. The decision is expected to be made by the eight OPEC+ countries with voluntary production cuts. Commerzbank's analyst Carsten Fritsch highlights the risks involved in this forward-looking move.
The OPEC+ countries are set to increase oil production by 411 thousand barrels per day in August, marking the fourth increase since April. This would bring the total supply increase to nearly 1.8 million barrels per day. The surplus supply is expected to lead to a market oversupply once the summer demand weakens, potentially causing a drop in oil prices.
President Putin mentioned the stronger summer demand, indicating a possibility for a larger supply increase. Deputy Prime Minister Novak of Russia anticipates discussions on further production volume increases at the upcoming meeting on 6 July.
Kazakhstan and Russia, which had reservations about production hikes previously, are now seemingly in agreement. The decision to raise production is likely to be made by the eight OPEC+ countries with voluntary production cuts.
Commerzbank's commodity analyst Carsten Fritsch reported the news, citing delegates from the production cartel. The information provided contains forward-looking statements and should not be considered as investment advice.
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