OPEC+ is set to increase production again – Commerzbank

The eight OPEC+ countries with voluntary production cuts are likely to decide next weekend to increase oil production by 411 thousand barrels per day in August, as reported by Reuters and Bloomberg, citing delegates from the expanded production cartel, Commerzbank's commodity analyst Carsten Fritsch notes.

OPEC+ to discuss further increase in production volumes

"This is no longer a big surprise. Kazakstan didn't reduce production towards the agreed production target in June either, but apparently even increased it further. Russia, which expressed reservations about a larger increase in production a month ago, does not seem to have any objections this time."

"President Putin referred on Friday to the stronger demand in the summer months, which would allow a larger increase in supply. Deputy Prime Minister Novak, who will attend the meeting on 6 July on behalf of Russia, expects that a further increase in production volumes will be discussed there."

"The fourth increase of 411 thousand barrels per day would bring the total increase in supply since April to nearly 1.8 million barrels per day. This additional supply is likely to lead to a considerable oversupply on the market as soon as the stronger demand subsides after the summer months. Oil prices are then at risk of a setback at the latest."