Earnings Mastery
  • Politics
  • Business
  • Investing
  • World
No Result
View All Result
  • Politics
  • Business
  • Investing
  • World
No Result
View All Result
Earnings Mastery
No Result
View All Result
Home Investing

Summer demand could support OPEC+ output increases, say analysts

May 29, 2025
in Investing
Summer demand could support OPEC+ output increases, say analysts
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Anticipation is building in the oil market as the OPEC+ meeting approaches, with a production decision expected over the weekend. 

The eight cartel members who previously implemented voluntary production cuts are now contemplating a substantial rollback of these cuts in July. 

The eight members of the Organization of Petroleum Exporting Countries and allies, including kingpin Saudi Arabia and Russia, had previously agreed to increase oil production by over 400,000 barrels daily in May and June. 

“Markets are currently influenced by headlines, but they are truly awaiting a clear signal from the fundamentals,” Mukesh Sahdev, global head of commodities market, oil at Ryatad Energy, said in an email.

“Even when factoring in potential downside risks, the numbers we’re seeing suggest there’s space for additional OPEC+ output in July,” he added.

This is further noted in the Brent futures curve, which remains in backwardation through October 2025. 

Strength in prices

Oil prices have firmed over the last few sessions, albeit thinner trading earlier this week due to public holidays in the US and UK. 

“The strength is likely due to relief that the threat of new US tariffs against the EU has been postponed for the time being,” Barbara Lambrecht, commodity analyst at Commerzbank AG, said. 

However, many uncertainties remain, especially with regard to (US) sanctions policy.

On the one hand, there are the nuclear negotiations between the US and Iran.

Although these were so far inconclusive, both sides remained optimistic after the fifth round of talks and want to meet again in the near future.

A possible easing of sanctions against Iran therefore remains on the table.

On the other hand, despite a downturn in relations between Russian President Putin and US President Donald Trump, triggered by Moscow’s extensive attacks on Ukraine, Trump has stated he will “absolutely consider” implementing new sanctions against Russia. 

Conversely, Russia appears intent on minimising the significance of Trump’s response.

“Chart-wise, crude oil has been in a downtrend ever since prices peaked in March 2022, soon after Russia invaded Ukraine,” said David Morrison, senior market analyst at Trade Nation. 

But that doesn’t mean that prices can’t spike sharply in either direction.

Summer demand supports OPEC output increases

According to analysts and experts, oil demand rises sharply during the summer months from May to August. 

This presents a suitable opportunity for OPEC+ to increase oil production without flooding the market. 

Liquids demand growth this summer is being driven by Europe and the Middle East, rather than Asia or North America.

Supply-side growth is primarily driven by Saudi Arabia, the US, Canada, and Brazil. However, Canada’s output faces wildfire risks, and Brazil’s may see softer demand due to alternative supplies.

Global liquids demand is projected to grow by only 700,000 barrels per day in 2025, according to Rystad Energy’s calculations.

However, fundamentals from May to August are supportive, with demand growth outpacing supply growth by 600,000-700,000 barrels per day, the Norway-based energy intelligence company said.

Source: Rystad Energy

Additionally, crude and condensate demand is projected to exceed supply by over 1 million barrels daily for the indicated timeframe, Rystad noted. This assessment precedes the upcoming OPEC+ meeting this Saturday.

Refinery demand growth and supply

Globally, increased crude demand for refineries is anticipated from Asia, North America, Europe, and Russia.

Russian refinery operations may become especially important as tightening sanctions on its crude exports could lead to an increase in domestic refining.

“Overall, oil market uncertainty is likely to prompt many countries to maximize refinery runs and build product inventories, especially as stock levels remain low across regions,” Sahdev said. 

Challenges already plague US crude oil production, and the earlier narrative of a significant increase in drilling activity has faded.

With the West Texas Intermediate crude oil, the benchmark price for US oil, hovering around $60 per barrel, producers are unlikely to expand drilling activities, experts said. 

Source: Rystad Energy

Output declines elsewhere

From May to August, output reductions are anticipated for Kazakhstan and other OPEC+ participants. This situation will allow the eight OPEC+ nations to reactivate some of their previously offline supply.

To bolster refinery margins, Saudi Arabia might provide crude oil at reduced prices for July.

Strong product margins continue to support high levels of refinery operation. 

Furthermore, the recovery of high sulfur fuel oil margins into profitable territory provides an incentive for less complex refineries to also increase their processing rates.

“In this environment, driven by public narratives and differing opinions, OPEC+ has an opportunity to increase supply modestly in July,” Sahdev said.

However, beyond August into September, this window could close, and any further increase would likely depend on supply disruptions elsewhere in the market.

The post Summer demand could support OPEC+ output increases, say analysts appeared first on Invezz

Previous Post

Court blocks Trump tariffs: markets get a lift, but uncertainty prolonged

Next Post

China will ‘move on’ with or without Nvidia chips, says CEO Jensen Huang

Next Post
China will ‘move on’ with or without Nvidia chips, says CEO Jensen Huang

China will ‘move on’ with or without Nvidia chips, says CEO Jensen Huang

    Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    Europe markets open: stocks rise as US hints at tariff delay; auto sector gains 1.4%

    June 27, 2025
    US-China sign trade deal, 10 more with trading partners ‘imminent’: report

    US-China sign trade deal, 10 more with trading partners ‘imminent’: report

    June 27, 2025
    Xiaomi stock price hits record high as Apple stumbles

    Xiaomi stock price hits record high as Apple stumbles

    June 27, 2025
    NTT Data Group plans Singapore REIT IPO in biggest deal since 2017

    NTT Data Group plans Singapore REIT IPO in biggest deal since 2017

    June 27, 2025
    Jio Financial shares rally close to 5% after SEBI nod to Jio BlackRock Broking

    Jio Financial shares rally close to 5% after SEBI nod to Jio BlackRock Broking

    June 27, 2025
    CAC 40 2025 outlook: Biggest winners and losers revealed

    CAC 40 2025 outlook: Biggest winners and losers revealed

    June 27, 2025

    Disclaimer: EarningsMastery.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Popular

    Warren Buffett stepping down: analysts assess what it means for Berkshire stock and investors

    Warren Buffett stepping down: analysts assess what it means for Berkshire stock and investors

    May 6, 2025

    Latest

    Europe markets open: stocks rise as US hints at tariff delay; auto sector gains 1.4%

    June 27, 2025
    US-China sign trade deal, 10 more with trading partners ‘imminent’: report

    US-China sign trade deal, 10 more with trading partners ‘imminent’: report

    June 27, 2025
    Xiaomi stock price hits record high as Apple stumbles

    Xiaomi stock price hits record high as Apple stumbles

    June 27, 2025
    • About us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 earningsmastery.com | All Rights Reserved

    No Result
    View All Result
    • Politics
    • Business
    • Investing
    • World

    Copyright © 2025 earningsmastery.com | All Rights Reserved