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Oil continues to go down.
What implies the increase in OPEC+production?
The OPEC+, which brings together the 13 members of the organization of oil exporting countries with 10 allied countries, such as Russia, has been adjusting its production policy since the beginning of the pandemic, in order to maintain the stability of the oil market.
This production increase responds to the expectation of a Greater global oil demand In the coming months, promoted by economic recovery after pandemic.
However, the market seems to have reacted cautiously, interpreting that an excess of supply could exert bear pressure on prices, especially if the demand does not grow to the expected rhythm.
What countries decided to increase oil production?
The countries that said they increase oil production are Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman, all members of OPEC+.
“The eight OPEC+countries, which previously announced additional volunteer adjustments in April and November 2023 (Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman), gathered virtually on May 3, 2025 for Analyze the conditions and perspectives of the global market“explains the statement after the meeting.
“In view of the solid current fundamentals of the market, reflected in the low oil inventories”, those eight countries, a key group of the alliance composed of the twelve members of the OPEC, and ten allied producing nations, “will implement an adjustment (upward) of 411,000 barrels per day in June 2025,” the press part added.
The volume of the increase is the triple they had initially agreed as a monthly increase for each month. The original plan, which entered into force on April 1, provided for a slow and constant rise over 18 months from April, with monthly increases of some 137,000 barrels per day.
Reaction of markets and short -term perspectives
The market reaction reflects the current uncertainty about the balance between supply and demand. Although prices have managed to stabilize after the initial announcement, analysts warn that the market could experience new fluctuations based on how global demand, storage levels and response of other large producers, such as the United States.
In addition, the evolution of geopolitical and economic factors – such as conflicts in producing regions, monetary policy decisions or dollar behavior – will also influence the behavior of Petroleum Market over the next weeks.
The OPEC justified decision in optimistic perspectives, with a growing demand in the holiday season during the boreal summer. The ministers of the sector of the aforementioned eight countries will return to meet on June 1 “to decide the production levels of July”.
How much can Brent oil quote
According to DNB Market Analysts, Brent could potentially fall below $ 50 per barrel By the end of this year if the Opec+ continues to accelerate its production increases.
After the decision of the weekend, the oil group and its allies could also implement greater supply increases in July, August, September and October If the compliance between the Member States does not improve.
The analysts of DNB Markets They also pointed out that oil prices need to fall below the marginal cost of long -term supply when OPEC+ It is rapidly returning the production capacity to the market.
They also explained that a lower oil price could help rebalance the oil market and gradually eliminate the excess supply induced by the OPEC. This would happen by reducing NO-Ope supply and stimulating oil demand.
Analysts also clarified that the marginal cost of long -term supply refers to the price level required to justify investment in new production capacity, especially producers with higher costs.
Conclusion: Volatility and caution in the energy market
The fall of Brent oil price and of WTI After the announcement of the OPEC+ shows the High sensitivity of the energy market Given changes in production and offer expectations.
So far this year, The price of Brent crude barrel has dropped around 20%, while WTI accumulates a fall of more than 19%.
Although the objective of the increase in production is to accompany the global economic recovery, the market reacts nervously to the possibility of a mismatch in the balance between supply and demand.
For now, the eyes of investors and analysts will be placed in the evolution of global economic data, the behavior of energy consumption and future OPEC+ decisions in a context still marked by volatility and uncertainty.
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