OPEC+ to hike oil output beyond previous plans
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The news: OPEC+ will make a larger than anticipated increase to oil supply in May, adding an extra two months’ worth of tranches on top of its previous hike plans.
The numbers: The cartel will add 411,000 barrels per day to the market from May, beginning its “gradual and flexible” return to the 2.2 million barrels per day voluntary adjustments starting from 1 April. The increase comprises the increment originally planned for May in addition to two monthly increments.
Oil futures fell 5.5% to USD70.80 ($111.41) a barrel as of 12:35pm in London.
The context: An OPEC+ statement reads that the eight countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman spoke on Thursday to review global market conditions and outlook.
Bloomberg reports that the acceleration of the cartel’s production increase is intended to put pressure on OPEC+ members that have been exceeding their supply quotas, notably Kazakhstan.
Earlier this week, Russia ordered the Black Sea terminal handling Kazakhstan's oil exports pumped by US majors Chevron and Exxon Mobil to close two of its three moorings amid a standoff between Kazakhstan and OPEC+ over excess production.
Several OPEC+ members rely on higher crude prices to balance state budgets, and the group has been facing pressure from Trump to cut the price of oil.
The eight countries will meet on Saturday 5 May to decide on June production levels.
