OPEC+ Considers Another Big Oil Production Hike in July

The OPEC+ alliance is discussing the idea to make another big production increase in oil production for July, delegates from the group told Bloomberg News on Thursday. OPEC+ has already announced two consecutive production increases for May and June, each of 411,000 barrels per day (bpd), triple the volume the group had previously planned.Another 411,000-bpd output hike is among the options which the OPEC+ member countries that have been withholding output are discussing for the July production, according to Bloomberg’s sources.OPEC+ producers Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman will make the final decision on July output levels at a meeting on June 1.As of today, no final agreement on July oil production levels has been reached, the unnamed OPEC+ delegates told Bloomberg. In the early-May meeting to decide June output levels, the OPEC+ producers cited once again “current healthy oil market fundamentals” as the basis for their decision to continue boosting production by larger volumes per month than previously expected. The latest OPEC+ production policies suggest that top OPEC producer Saudi Arabia is willing to endure a short-term pain with lower oil prices to punish the overproducers in the OPEC+ deal and to start spoiling the shale party in the United States. In America, shale producers are cutting spending and scaling back drilling activity with WTI oil prices close to or lower than the breakeven price for profitably drilling a new well. Saudi Arabia’s goal is long-term oil market stability, while the Kingdom is always ready for multiple oil price scenarios, Saudi Minister of Economy and Planning, Faisal Alibrahim, said earlier this week. Oil prices were down by 1% in Asian trading early on Thursday, with WTI Crude at $61 and Brent at $64 per barrel, as Wednesday’s war premium on reports that Israel could attack Iranian nuclear facilities fizzled out after the EIA report of crude and fuel inventory builds in the United States. By Tsvetana Paraskova for Oilprice.com