OPEC+ set to increase supply – ING
Oil prices are under pressure with ICE Brent settling more than 1.6% lower yesterday. This follows news that OPEC+ is sticking with plans to gradually increase supply from April by 138k b/d in the month, ING's commodity experts Ewa Manthey and Warren Patterson note.
OPEC+ is sticking with plans to gradually increase supply
"The market had been pricing in the possibility that the group might delay an increase in supply. This development hasn’t changed our view on the market, as we already thought supply would return. The increase is likely to make President Trump happy, given the pressure he’s been putting on OPEC to boost supply."
"According to a Bloomberg survey, OPEC oil production increased by 320k b/d month on month in February to 27.35m b/d. The bulk of the increase was driven by Iraq, with output growing by 150k b/d to 4.16m b/d, leaving production above its target level of 4m b/d. Fairly sizable increases were also seen in Libya, Venezuela and the UAE."
"Along with supply dynamics, there are growing concerns about demand levels amid uncertainty about tariffs. The Atlanta Fed’s GDPNow model suggests first quarter GDP will contract by 2.8%. Just 4 weeks ago, the model was forecasting growth of 3.9%. Trump increased tariffs on China to 20% from 10%, while also allowing 25% levies to go ahead for Canada and Mexico starting today. For Canadian energy, the tariff is set lower at 10%. Given the lack of alternative export capacity for Canadian oil, discounts for Canadian crude will increase thanks to these tariffs."
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FXStreet Insights Team
FXStreet
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