The $100+ per barrel of crude oil is over - OPEC increases production in July 2022

Update: OPEC rips off the band-aid - accelerating production growth targets
Jun. 02, 2022 9:58 AM ET
By: Nathan Allen, SA News Editor
https://seekingalpha.com/news

Update: Russia was included in OPEC+ quotas for July 2022, despite rumors Russian quotas would be suspended.

Sources cited by the Wall Street Journal indicate OPEC+ is planning to lift production growth targets to 600kb/d for July and August, an acceleration from the past year of 400kb/d monthly increases (USO).

Sources cited by Reuters and Bloomberg have indicated that OPEC+ is planning for 648kb/d of production growth in July and August.

In April, OPEC's "core group of 10" beat production growth targets, an indication that recent challenges in Nigeria (XOM) and Angola (TTE) are masking some ability to grow production in Saudi (ARMCO) and the UAE (SHEL).

Coming into 2022, OPEC production capacity was a key source of uncertainty for energy investors (XLE); however, assuming the rumors coming out of the OPEC Ministerial meeting are true (and approved by OPEC+), markets will soon have a clear picture of spare capacity in Saudi and the UEA.

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Worldwide oil consumption reached approximately 88.5 million barrels per day in 2020. This was a decrease of nine million barrels compared to the previous year and resulted from pandemic-enforced mobility restrictions leading to a decline in transportation fuel demand. Apart from the years of the financial crisis and the 2020 coronavirus pandemic, oil consumption consecutively increased in every year since 1998.

https://www.statista.com/statistics/265239/global-oil-consumption-in-barrels-per-day/

600kbpd is about half a percent of total world consumption. I dont see that moving the needle.

I just checked and saw that the price went from 115 to 119 since you posted this.

By July there could be other factors that drive the price up or down.

Statements from OPEC are just one input and not always reliable commitments.

OPEC+ hasn’t even come close to hitting the 400k per month they initially promised (a couple months have been near 0 growth) So now they say they will increase even more? Riiiiiiight. I watch oil markets like a hawk, Russia / Ukraine is only a small part of the current high price. The biggest contributor is the “emperor has no clothes” moment the OPEC+ supply agreement from last year has provided.

I agree. Nobody knows where crude price will go.

This will have almost zero impact on prices. It will take more than this to make a large dent on oil supply/demand.

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The $100+ per barrel of crude oil is over - OPEC increases production in July 2022

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