The Organization of the Petroleum Exporting Countries and its allies agreed on Saturday to increase supply targets by 411,000 barrels a day for July, matching increases scheduled for May and June. The hikes marked a radical reversal from the cartel’s former strategy of defending prices by curbing output.
Goldman Sachs Group said it expects OPEC+ to repeat recent production increases for a fourth month for August, a change from its earlier forecast that the group would pause after last weekend’s meeting.
“Relatively tight spot oil fundamentals, beats in hard global activity data, and seasonal summer support to oil demand” are all supportive, analysts including Daan Struyven said in a note. “The expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6.”
