OPEC+ Eyes July Output Hike—Can the Market Absorb More Barrels?
Oil prices slid over 1% Thursday following a Bloomberg report that OPEC+ is weighing a production increase of 411,000 barrels per day for July. This potential policy shift would come on top of earlier additions already planned for May and June. While no official deal has been finalized, the size and timing of the increase are sparking fears that supply growth could outpace demand.
Traders are recalibrating positions based on a shift in tone from Saudi Arabia and its allies, who appear to be prioritizing market share over price defense. Analysts, including RBC Capital’s Helima Croft, see the proposed 411,000 bpd increase—mostly from Saudi Arabia—as the likely outcome from the June 1 meeting.
U.S. Crude Inventories Rise Unexpectedly, Undermining Demand Signals
Adding to the bearish tone, the latest Energy Information Administration (EIA) data showed an unexpected 1.3 million barrel build in U.S. crude stocks last week, bringing inventories to 443.2 million barrels. This contrasts sharply with expectations for a 1.3 million barrel draw.
Higher imports and a dip in gasoline and distillate demand helped push inventories higher. According to LSEG’s Emril Jamil, the surprise build—especially amid lower domestic demand—could push more U.S. crude toward export markets, particularly in Europe and Asia.
