Oil prices land 1% after a report on the discussion of OPEC+ increased production

Oil prices fell 1% today, Thursday, after a report stated that OPEC+ discusses the increase in production in July, which raised fears that any increase in the global supply would exceed demand growth.

Brent crude futures fell to $ 64.27 a barrel by 09:00 GMT, while Texas crude fell to $ 60.98.

“Bloomberg” stated that the Organization of Petroleum Exporting Countries (OPEC) and its allies, a bloc known as OPEC+, discuss the possibility of another significant increase in production for the third consecutive month in July during their scheduled meeting on June 1.

The report quoted representatives of the saying that the increase in production is 411 thousand barrels per day in July, among the options offered for discussion, but no final agreement has been reached yet.

Harry Chiligurian of the “Onex Capital” group said, “We are witnessing the interaction of the market with indicators of OPEC’s abandonment of the strategy of defending prices in favor of increasing the market share, it is like removing a wound bandage you have to do so in one step.”

OPEC+ works to reduce the volume of production cuts by pumping additional quantities in the market in May and June, and Reuters reported that the group may return to the market up to 2.2 million barrels per day by November.

The analyst at RBC Capital Halima Croft said yesterday, Wednesday, that the increase in production is 411 thousand barrels per day from July is the most likely result of the meeting, especially from Saudi Arabia.

Prices have already decreased after the US Energy Information Administration data released yesterday showed a sudden rise in crude stocks and fuel last week, while crude oil imports reached their highest level in 6 weeks, and the demand for gasoline and distillation products decreased.

The Energy Information Administration stated that crude oil stocks rose 1.3 million barrels to 443.2 million barrels in the week ending May 16, and analysts had expected a Reuters poll to decline 1.3 million barrels.

A beautiful, senior, chief analyst in oil research at the London Stock Exchanges Group said, “The surprising increase in stocks announced by the US Energy Information Administration will put pressure to pushing oil to decline, especially West Texas Intermediate crude.” He added that this may stimulate a greater increase in American exports to Europe and Asia.

While OPEC+discussions are taking place, the rise of the return on US Treasury bonds for 10 years indicates that the group may raise oil supplies in a market that is witnessing a decline in demand.