Ministers from the OPEC+ alliance are set to meet on Wednesday to review production levels, as oil markets remain on edge over the potential for further output increases. The meeting comes at a delicate time, with crude prices under pressure and fears mounting that another supply boost could exacerbate the downward trend.
Oil prices have slipped in recent weeks, largely due to growing concerns over a potential global economic slowdown. Investors are particularly worried that U.S. President Donald Trump’s aggressive tariff policies could lead to reduced global demand for energy, casting a shadow over market stability.
Since 2022, OPEC+ has implemented coordinated production cuts to support prices. However, the group surprised markets earlier this year by announcing output increases for May and June, despite previously committing to maintain cuts until late 2026.
READ ALSO: U.S. Stock Markets Hold Steady as Investors Await Nvidia’s Earnings After Trade Rally
The latest adjustments include a 411,000 barrels per day (bpd) hike in May and a similar increase for June—far exceeding the initially planned 137,000 bpd boost.
These unexpected moves have raised questions among analysts, some of whom speculate that the production hikes are intended to penalize member states that failed to meet their output quotas.
At their last major meeting in December, OPEC+ had agreed to continue withholding around two million bpd in collective cuts, plus an additional 1.65 million bpd in voluntary reductions from several member countries. But now, the group appears to be slowly unwinding those measures.
READ ALSO: Ukrainian FPV Kamikaze Drone Corners Russian Soldier in Intense Battlefield Footage
Market reactions to Wednesday’s developments have been mixed. Brent crude futures rose slightly by 0.19% to $64.21 per barrel, while U.S. West Texas Intermediate (WTI) saw a modest gain of 0.4% to $61.13 per barrel. The OPEC basket price stood at $65.01 per barrel on Tuesday, according to data from the OPEC Secretariat, up from $64.65 the previous day.
Despite these small gains, the market remains cautious, with expectations of further production increases limiting upward momentum. Reports suggest that OPEC+ may fully unwind its remaining 2.2 million bpd in voluntary cuts by the end of October, having already lifted production targets by approximately 1 million bpd for April through June.
As the OPEC+ meeting unfolds, all eyes will be on whether the alliance prioritizes market stability or continues to increase output, potentially driving prices further down in an already fragile economic climate.
Discover more from Scoop Hub
Subscribe to get the latest posts sent to your email.