{"id":6213,"date":"2022-06-05T17:07:55","date_gmt":"2022-06-05T17:07:55","guid":{"rendered":"https:\/\/euromenaenergy.com\/?p=6213"},"modified":"2022-06-05T17:07:55","modified_gmt":"2022-06-05T17:07:55","slug":"what-opecs-production-deal-means-for-global-oil-markets","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=6213","title":{"rendered":"What OPEC+\u2019s Production Deal Means for Global Oil Markets"},"content":{"rendered":"
\n
\n
\n

OPEC+\u2019s hotly anticipated output meeting\u00a0on Thursday underwhelmed the market, with oil prices closing up after the decision.<\/p>\n<\/div>\n<\/address>\n<\/div>\n

\n
\n

The alliance agreed to production hikes of 648,000 barrels a day for July and August, about 50% bigger than those seen in recent months. But there were doubts about the group\u2019s ability to fully deliver the increases, given they will be spread across its members, many of whom have struggled to raise output.<\/p>\n

Oil\u2019s just capped its sixth straight monthly gain — the longest such run in a decade — and\u00a0the rally\u00a0now looks set to continue as the supply deficit widens.<\/p>\n

Here\u2019s what leading analysts had to say about the OPEC+ decision and what it would mean for oil prices.<\/p>\n

Rapidan Energy Group<\/h3>\n

OPEC+\u2019s decision is beneficial to the US as it increases global supplies while keeping some spare capacity that can be deployed if sanctions on Russia sway markets, Bob McNally, president of Washington-based consultant Rapidan Energy Group and former White House official said in a Bloomberg TV\u00a0interview.<\/p>\n

Increased quotas will result in a 350,000 barrels jump in actual daily output, he said, adding that the decision was \u201can elegant threading of the needle\u201d that satisfies OPEC, Russia and the Biden administration.<\/p>\n

JPMorgan Chase Bank<\/h3>\n

The latest deal to increase production quotas in July and August\u00a0isn\u2019t sufficient\u00a0to make a difference in global oil balances, according to JPMorgan analyst Natasha Kaneva in an emailed note. The higher output won\u2019t offset heightened demand at seasonal peaks alongside China\u2019s reopening, with risks to the bank\u2019s supply estimates skewed to the downside, it said.<\/p>\n

The bank maintains its Brent price forecast of $114 a barrel for the second quarter and sees prices averaging $104 a barrel this year.<\/p>\n

Goldman Sachs Group Inc.<\/h3>\n
<\/div>\n

The latest OPEC+ decision translates to an increase of 200,000 barrels a day in summer output levels with Russia still keeping its quota share and many countries falling behind target, analysts Damien Courvalin and Callum Bruce said in a note. The deal doesn\u2019t represent higher output levels for later this year, with production simply brought forward from September.<\/p>\n