Goldman Sachs analysts expect OPEC+ to pause further oil production hikes due to growing concerns over the weakening global economy, according to a report from @FirstSquawk.
The bank anticipates that the oil alliance will decide in July to raise output by 411,000 barrels per day (bpd), but that move could be reconsidered if economic data continues to show signs of a slowdown.
If confirmed, the pause would reflect increasing pressure on OPEC+ to adjust production plans in response to faltering global oil demand.
Earlier this month, on May 6, OPEC+ agreed to boost daily production by 411,000 bpd for June. This brought the group’s total planned output increase for April through June to 960,000 bpd—reversing around 44% of the 2.2 million bpd in cuts previously agreed upon.
The decision to raise quotas took many by surprise and briefly sent oil prices lower. However, analysts at Oilprice.com pointed out that some members—such as Iraq and Nigeria—were already producing above their quotas. The new targets effectively legitimize this overproduction rather than adding much new supply to the market.
Despite concerns over demand and higher production targets, oil prices have remained relatively strong. As of 1:11 p.m. ET on May 12, Brent crude was up 2% at $65.19 per barrel, while U.S. West Texas Intermediate (WTI) rose 2.05% to $62.27 per barrel. The uptick was supported by optimism over progress in U.S.-China trade talks, which may boost crude demand from the world’s two largest oil consumers.