Crude Appears to be Consolidating as Markets Await OPEC Meeting

Crude prices appear to be consolidating around the $65 per barrel level as markets await the upcoming OPEC+ meeting, Ole R. Hvalbye, a commodities analyst at Skandinaviska Enskilda Banken AB (SEB), said in an oil report sent to Rigzone by the SEB team on Tuesday.

“We expect the group to finalize its July output plans, driven by the eight key producers known as the ‘Voluntary Eight’, on May 31st, one day ahead of the original schedule,” Hvalbye stated in the report.

“We assign a high probability to another sizeable output increase of 411,000 barrels per day. However, this potential hike seems largely priced in already,” he added.

“While a minor price dip may occur on opening next week (Monday morning), we expect market reactions to remain relatively muted,” he continued.

A release posted on OPEC’s website on May 3 announced that Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “will implement a production adjustment of 411,000 barrels per day in June 2025 from [the] May 2025 required production level”.

“The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023 … met virtually on 3 May 2025, to review global market conditions and outlook,” that release noted.

“In view of the current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 411,000 barrels per day in June 2025 from May 2025 required production level,” it added.

The release highlighted that “this is equivalent to three monthly increments” and pointed out that “the gradual increases may be paused or reversed subject to evolving market conditions”.

A release posted on OPEC’s website on April 3 announced that Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “will implement a production adjustment of 411,000 barrels per day, equivalent to three monthly increments, in May 2025,”.

The statement posted on OPEC’s site on May 3 revealed that the eight countries will meet on June 1 to decide on July production levels.

Oil Prices Have Trended Lower

In the SEB report, Hvalbye noted that, “following the rebound on Wednesday last week, when Brent reached an intra-week high of $66.6 per barrel, crude oil prices have since trended lower”.

“Since opening at $65.4 per barrel on Monday this week, prices have softened slightly and are currently trading around $64.7 per barrel,” he highlighted.

Hvalbye went on to state in the report that, this morning, oil prices are “trading sideways to slightly positive, supported by signs of easing trade tensions between the U.S. and the EU”.

“European equities climbed while long-term government bond yields declined after President Trump announced a pause in new tariffs yesterday, encouraging hopes of a transatlantic trade agreement,” Hvalbye said.

“The optimisms were further supported by reports indicating that the EU has agreed to fast-track trade negotiations with the U.S.,” he added. 

“Meanwhile, the U.S. president expressed optimism following the latest round of nuclear talks with Iran in Rome, describing them as ‘very good’,” he continued.

“Although such statements should be taken with caution, a positive outcome now appears more plausible. A successful agreement could eventually lead to the return of more Iranian barrels to the global market,” Hbalbye went on to state.

Rigzone has contacted the White House, OPEC,  the European Commission Chief Spokesperson, and the Iranian Ministry of Foreign Affairs for comment on the SEB report. At the time of writing, none of the above have responded to Rigzone.

To contact the author, email andreas.exarheas@rigzone.com