Goldman Sachs analysts believe OPEC+ is likely to halt further oil production increases due to signs of a weakening global economy. According to a report by @FirstSquawk, the group is expected to make a final decision in July on whether to proceed with a planned output hike of 411,000 barrels per day (bpd). However, this decision could be reconsidered if economic data continues to deteriorate.
If Goldman’s forecast proves accurate, it would mark another sign that OPEC+ is facing mounting pressure from slowing global oil demand.
Earlier this month, on May 6, OPEC+ announced a production increase of 411,000 bpd for June. This follows earlier hikes in April and May, bringing the total increase to 960,000 bpd. That represents a 44% reversal of the group’s earlier commitment to cut 2.2 million bpd.
The surprise quota hike initially pushed oil prices lower, but the actual impact may be limited. Many member countries, including Iraq and Nigeria, have already been producing above their assigned quotas. As a result, the new targets largely formalize existing overproduction.
Despite the planned increases, oil prices have remained stable. On May 12, Brent crude rose 2% to $65.19 per barrel, while U.S. West Texas Intermediate (WTI) gained 2.05% to reach $62.27.
Analysts say the price boost was partly driven by signs of progress in trade negotiations between the United States and China. This has raised hopes for stronger oil demand from the world’s two largest energy consumers.
Related Topics:
- China’s Coal Imports Fall 6% in March Due to Low Demand, High Stocks
- UK Government Funds Coal Shipment to Support British Steel’s Furnaces
- Indonesia’s Coal Expansion Plan Faces Climate and Cost Challenges