Oil prices are expected to close the week lower, following reports that OPEC+ may increase production and positive developments related to the Ukraine conflict.
OPEC+ is considering raising output, especially as some members, such as Kazakhstan, struggle to meet their output reduction targets. This comes amid geopolitical shifts, including signs of progress in US-Russia talks over Ukraine and Iran’s willingness to resume nuclear discussions. These factors are contributing to a bearish outlook for oil prices.
As of the latest data, Brent crude is priced at $66.98 per barrel, while West Texas Intermediate (WTI) stands at $63.21 per barrel. Despite a downward trend this week, the decline in prices is expected to be minimal.
Earlier this week, Reuters reported that OPEC+ could boost production after its June meeting to address underperformance by some members, particularly Iraq and Kazakhstan. The group has struggled to secure compensatory cuts from these countries. Kazakhstan, in particular, has been a challenge for OPEC+, with the country’s energy minister recently stating that the government cannot force independent operators to cut production, which could impact future output.
Amrita Sen of Energy Aspects noted that Kazakhstan’s stance strengthens the possibility of OPEC+ further unwinding production cuts, possibly in May, July, and throughout the summer.
In addition to supply concerns, positive geopolitical developments have added to the bearish sentiment. Russian Foreign Minister Sergey Lavrov suggested that Moscow and Washington were moving closer to an agreement on Ukraine, with only a few details left to finalize. Meanwhile, Iran’s Foreign Minister Abbas Araqchi expressed readiness to engage in nuclear negotiations with European powers, signaling a potential thaw in relations that could lead to the lifting of US sanctions.
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