On Thursday, oil producer group OPEC+ is expected to approve another small production rise for June, despite persisting concerns about weakening Chinese demand, shortly after, the world’s largest trading bloc unveiled proposals for further sanctions against Russian petroleum, reports CNBC.
It is widely expected that OPEC+ ministers will agree to lift production targets for next month by 432,000 barrels per day, adhering to the existing strategy of gradually unraveling record supply cutbacks.
“OPEC+ is unlikely to supply additional oil into the market to resolve any market tightness, as they are very happy with prices remaining above $100/bb,” stated Ajay Parmar, senior oil market analyst at commodity intelligence service ICIS.
“Any substantial increase in additional supply from OPEC+ will threaten these high prices,” Parmar added. “Instead, they are expected to continue with the slow claw-back of market share throughout 2022.”
The latest meeting of the group takes place amid a supply problem. In its latest round of economic measures, the European Union announced plans on Wednesday to ban Russian oil imports within six months and refined products by the end of the year.
Stephen Brennock, a senior analyst at PVM Oil Associates in London, said expectations are that OPEC+ will “remain unmoved” by the prospect of an increasing shortfall in Russian oil supplies even as several member states struggle to meet their production targets.
He thinks that the supply deficit will continue in the coming months.
