Oil Set For Weekly Loss on OPEC+ Supply Rumors
Crude oil prices were about to end the week with another loss following a report that OPEC+ may be considering another larger than initially planned output boost in June. A renewed hope for peace in the Ukraine contributed to the bearish mood among traders.
Benchmarks were both up at the time of writing, with Brent crude at $66.98 per barrel and West Texas Intermediate at $63.21 per barrel. The weekly trend is downward but it will be a slim decline.
Earlier this week, Reuters reported OPEC+ could add more barrels to production after its June meeting to get quota laggards in line after trying unsuccessfully to do that by extracting commitments of compensatory cuts from the biggest ones, Iraq and Kazakhstan. The report cited unnamed sources familiar with the group’s talks on the topic.
Kazakhstan has proved to be particularly bothersome for OPEC+, with its energy minister recently saying the government could not force independent operators to reduce output and had no intention of cutting output at state-managed fields because this would affect future production, Reuters also noted in its report.
“Kazakhstan's statement cements our view that OPEC+ may implement another accelerated three-month unwind again in the May meeting and it may continue again in July and through the summer,” Energy Aspects’ Amrita Sen said following that statement.
In other bearish news for oil prices, Russia’s Foreign Minister Sergey Lavrov told CBS that Moscow and Washington were moving in the right direction with regard to the Ukraine, saying that “We are ready to reach a deal, but there are still some specific points - elements of this deal which need to be fine-tuned.”
Meanwhile, Iran’s Foreign Minister, Abbas Araqchi said this week he was willing to travel to Europe for negotiations on Iran’s nuclear program with European powers, suggesting Tehran wants to mend fences, which may at some point lead to the lifting of U.S. sanctions.
By Irina Slav for Oilprice.com
