The news from the weekend from OPEC+ meeting, raising oil output more than expected:
- OPEC+ to raise output by 548,000 bpd in August vs 411,000 bpd in July
In effect, the decision returns nearly 80% of the 2.2 million bpd
voluntary cuts from eight OPEC producers back in the market
- actual output increase has been smaller than planned so far
- most of the supply has been from Saudi Arabia
OPEC+ cited
- steady global economic outlook
- healthy
market fundamentals - low oil inventories
as reasons
for releasing more oil.
Analysts have responded with:
- increased production represents a more
aggressive competition for market share - OPEC+ showing some tolerance for
the resulting decline in both prices and revenue
The price response:
- Oil prices fell just over 1% at the Globex open on Sunday evening US time
Goldman Sachs expects an slightly bigger boost at the next meeting, scheduled for August 3:
- expect a final 550,000
bpd increase for September
Update:
This article was written by Eamonn Sheridan at www.forexlive.com.
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