Oil rebounds after OPEC+ sticks to 411,00 b/d output hike
Crude prices rebounded more than $1 a barrel on Monday after OPEC+ member countries agreed to pump 411,000 more barrels per day (b/d) of crude in July, the same amount as it did in each of the prior two months.
The third output hike by the eight OPEC+ countries in as many months was in line with market expectations. Brent crude futures climbed $1.19, or 1.9%, to $63.97 a barrel by 0044 GMT after settling 0.9% lower on Friday. US West Texas Intermediate crude was at $62.09 a barrel, up $1.30, or 2.14%, following a 0.3% decline in the previous session, Reuters reported.
The OPEC+ decision was in view of “a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025,” the group said in a statement following a virtual meeting on May 31.
The eight OPEC+ countries – Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman – had previously announced additional voluntary adjustments in April and November 2023. “The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability,” OPEC+ said.
The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation. The group reiterated its collective commitment to achieve full conformity with the Declaration of Cooperation (DoC), including the additional voluntary production adjustments that were agreed to be monitored by the JMMC during its 53rd meeting held in April 2024.
They also confirmed their intention to fully compensate for any overproduced volume since January 2024. The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation, with the next meeting scheduled on 6 July 2025 to decide on August production levels.
