OPEC + has agreed this Thursday gradually increase oil production between May and July, in response to internal and external pressure to supply more crude to the world economy in full recovery from the crisis caused by the Covid-19 pandemic. The group of producing countries has defied market expectations for the second time in less than a month, announcing that will add more than a million barrels per day to the market, according to a statement from the Ministry of Energy of Kazakhstan.
The group that encompasses OPEC and allied producers was expected to act with caution, but the pressures have been strong and finally it has ended up giving in and pumping more, according to Bloomberg. After knowing the news, the 'black gold' has registered a strong rebound. Barrel type Brent, a benchmark in Europe, registered increases of 1.5% to $ 63.68, while the quality West texas, a benchmark in the US, rose 2% to $ 60.35.
OPEC + has made this decision despite having lowered its forecast for oil demand growth. This Wednesday he said that he now expects oil demand to grow by 5.6 million barrels a day this year, which is a decrease of 300,000 compared to his previous forecast.
Specifically, the 23-nation coalition led by Saudi Arabia and Russia will increase production by 350,000 barrels per day in May, add the same volume again in June and increase by 450,000 barrels per day in July.
"Increase production by approximately 1 million barrels per day for three months when product demand is expected to increase at about 3 million barrels per day during the same period is not bearish. "" It is a conservative anticipation, but anticipation anyway, "they comment from IHS Markit. The OPEC + decision. "surprised"as expectations were not for an increase in May, but for a stronger increase in June, Oanda analysts note.
OPEC + decided in early March to keep the current cuts in its oil supply unchanged in April, except for Russia and Kazakhstan, which increased their pumping moderately. In addition, Saudi Arabia pledged to take off the market in April million barrels per day withdrawn in February and March, unilaterally and in addition to its part in the commitment to reduce the pumping.