OPEC+ confirms 411,000 barrels per day supply increase for June statement

OPEC+ confirms 411,000 barrels per day supply increase for June statement

In a significant development, OPEC+ has confirmed a further accelerated oil output hike for June, amounting to 411,000 barrels per day (bpd). This decision was reached during an online meeting of eight OPEC+ countries held on Saturday, ahead of the scheduled Monday meeting [1].

The move comes as oil prices have fallen below $60 a barrel, marking a four-year low. The latest increase is expected to bring the total supply hike to 822,000 bpd since December, when the group began to unwind its production cuts [1].

The decision was influenced by several factors, including modest compliance with production cuts from Kazakhstan and lower-than-expected OECD inventories. Additionally, Saudi Arabia's ability to handle lower oil prices has been a key consideration [2]. The OPEC+ group has been cutting output by over 5 million bpd, with many of these cuts set to remain in place until the end of 2026 [1].

Goldman Sachs, a leading financial institution, had previously forecasted a 410,000 bpd increase in supply for June, aligning closely with the confirmed decision [2]. The bank cited concerns over compliance, particularly from Kazakhstan, as well as lower-than-expected OECD inventories due to supply misses in Venezuela and U.S. shale. The bank also noted that Saudi Arabia can withstand lower oil prices, which has been a key factor in the decision-making process [2].

The expected increase in supply has been met with a drop in oil prices, with Brent crude futures falling by 84 cents, or 1.4%, to $61.29 a barrel on Friday [1]. Despite the recent decline, Goldman Sachs maintains its oil price forecast, expecting Brent to average $63 and West Texas Intermediate (WTI) $59 for the remainder of 2025, with Brent at $58 and WTI at $55 in 2026 [2].

The OPEC+ group will hold a full ministerial meeting on May 28 to further discuss the implementation of these supply changes [1].

References:
[1] https://www.marketscreener.com/quote/index/S-P-GSCI-PETROLEUM-INDEX-46869201/news/OPEC-agrees-another-accelerated-oil-output-hike-for-June-sources-say-49805270/
[2] https://www.reuters.com/markets/commodities/goldman-sachs-sees-410000-bpd-hike-opec-june-supply-2025-05-02/