OPEC+ OIL PRODUCERS MAINTAIN THEIR COURSE WITH ANOTHER SIGNIFICANT INCREASE FOR JULY
The world’s leading oil alliance, OPEC+, decided on Saturday to maintain its strategy by approving another substantial hike of 411,000 barrels per day for July, aiming to reclaim market share and discipline members who have exceeded their quotas.
After years of limiting output—cutting more than 5 million barrels a day (about 5% of global demand)—eight OPEC+ nations made a moderate production increase in April, then tripled it for May, June, and now July.
U.S. crude futures declined on Friday amid concerns that OPEC+ would raise oil output for July beyond what was previously expected.
Brent crude futures slipped by 22 cents, or 0.34%, to $63.93 per barrel. U.S. West Texas Intermediate crude dropped 21 cents, or 0.34%, to $60.73 per barrel after falling more than $1 earlier in the session.
Despite the additional supply putting downward pressure on crude prices, OPEC+ leaders Saudi Arabia and Russia are driving higher production to regain market position and penalize members such as Iraq and Kazakhstan for exceeding agreed limits.
“Today’s move highlights that market share is the priority. If price doesn’t deliver the desired revenue, they’re betting on volume,” noted analyst Harry Tchilinguirian of Onyx Capital Group. The eight countries convened virtually on Saturday to set July output and reviewed various options, according to a delegate. On Friday, insiders shared that an even larger increase was also under consideration.