Crude oil values experienced a downturn following indications that OPEC+ may deliberate a substantial production boost in June. Simultaneously, Kazakhstan is reportedly hesitant to implement deeper production reductions to offset prior instances of exceeding agreed-upon quotas. This internal friction poses a risk to price equilibrium, particularly given the prevailing global economic ambiguity, according to FX analysts at Danske Bank.
OPEC+ Contemplating Significant Output Expansion in June
“The ongoing disagreements within OPEC+ are becoming more pronounced. Yesterday, oil prices decreased due to reports that the organization is considering a significant increase in output for June. Furthermore, Kazakhstan appears unwilling to reduce its production levels to compensate for past overproduction.”
“As previously mentioned, the altered internal dynamics within OPEC+ have eliminated a safety net for oil prices. In the event of a resurgence in trade-related tensions or a weakening of the global economic perspective due to other factors, oil prices could be subject to a sharp decline.”
