OPEC Committee recommends maintaining production plan for July

At today's meeting, the OPEC+ Ministerial Monitoring Committee recommended keeping the oil production plan for June and July, reports Argus Media . This decision was expected - it means that the recovery of production will continue.

According to the current agreements, the OPEC+ collective production ceiling was raised by 350,000 b/d in May, by the same amount in June, and by 441,000 b/d in July. At the same time, Saudi Arabia will dissolve the 1 million b/d limit that has been additionally assumed by July.

Due to the fact that Russia could increase production from February to April, while other countries kept it at the level of January, in May-July the distribution of quotas will be disproportionate, Interfax notes. Russia will be able to increase production by 39 thousand b/d in May, by the same amount in June and July.

On Tuesday, June 1, oil quotes were at 2018 levels on doubts about the prospects for a nuclear deal with Iran and reports from the OPEC + committee about the almost complete elimination of the "overhang" of excess oil accumulated during the pandemic, writes Bloomberg . Brent oil cost more than $71 per barrel, WTI approached $68.5.

“Demand growth is stable, production discipline in the cartel is very good, stocks are declining,” Fereydun Fesharaki, founder of the FGE consulting group, told Bloomberg. “If the shadow of Iran does not fall on the market, in the middle of the third quarter we can see $75-80 per barrel.”