Oil found support following remarks from OPEC+ ministers

Brent moved higher after OPEC+ members reiterated the group’s readiness to pause or reverse the gradual increase in production that is expected to start in October this year, several market analysts said.

PHOTO: An oil pumpjack against the OPEC flag. Getty Images

Energy ministers from top OPEC+ producers, including Saudi Arabia, the UAE, and Russia have rejected the ‘bearish’ market reaction to the coalition’s latest oil output plans and reaffirmed that it is ready to pause or reverse its policies, subject to market conditions.

Last Sunday, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) decided to gradually phase out its combined supply cut of 2.2 million b/d between October 2024 and September 2025.

“Reiterations by OPEC+ ministers speaking on Thursday that the tapering of 2.2 million b/d of additional cuts agreed on Sunday could be paused or reversed also lent some support to crude,” VANDA Insights’ founder and analyst Vandana Hari said.

Speaking at the St. Petersburg International Economic Forum in Russia on Thursday, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman Al Saud said that the coalition can be quick about revising Sunday’s agreement and that the global oil market will recognise that the coalition did “the right thing,” Bloomberg reported.

“[Brent] crude oil prices rallied on hopes that OPEC may alter its production policy,” ANZ Bank’s senior commodity strategist Daniel Hynes said. Prices moved higher after the group said that “it retains the option to pause or reverse production changes if necessary,” he added.

Russia’s Deputy Prime Minister Alexander Novak said that the OPEC+ decision on oil production quotas will contribute to the global oil market’s stability, state-owned media agency TASS reported. Russia has maintained its oil output in May, following the OPEC+ agreement, TASS cited Novak as saying.

UAE’s energy minister Suhail Al Mazrouei said, “Sometimes the market doesn’t understand decisions. It takes time to analyze,” Bloomberg reported.

Comments from the oil group’s members confirm that “the announced production increase from October will depend on market conditions at the time,” analysts from Saxo Bank’s strategy team wrote in a note.

By Aparupa Mazumder 

Please get in touch with comments or additional info to news@engine.online