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At the beginning of Asian trading on Monday, May 5, oil prices fell by more than $2 per barrel after OPEC+ announced an acceleration of production growth, Reuters reports.
▪ Brent decreased by $2.04 (-3.33%) to $59.25 per barrel
▪ WTI fell by $2.10 (-3.60%) to $56.19 per barrel
This is the lowest level since 9 April. The OPEC+ group agreed to increase production in June by 411 thousand barrels per day, continuing the increase started in April. According to Reuters, the cumulative increase in production from April to June will reach 960 thousand barrels per day, which is 44% of the previous cuts agreed in 2022.
Analyst Tim Evans of Evans on Energy said the move reinforces expectations of a market glut:
“This is more than just a signal – it is a confirmation of a shift in the balance towards a surplus,” the expert said.
In addition, according to Reuters sources, OPEC+ is considering a complete cancellation of voluntary cuts by the end of October if member countries do not improve their compliance with quotas.
