This article came out on Friday. OPEC+ did announce a larger than expected oil supply increase on Saturday, but it really is not going to bring that much more oil to the global market.
OPEC Moves Up Meeting To Discuss Oil Production Quotas
By Julianne Geiger - May 02, 2025, 11:00 AM CDT
The OPEC+ members currently participating in voluntary production cuts will meet this Saturday, May 3, instead of Monday, May 5, according to Kpler’s Amena Bakr on X. The call is set for noon Vienna time, with the agenda focused on “consensus building around maintaining the sped-up increment of 411,000 barrels per day for June.” < Keep in mind that the global oil market consumes more than 103,000,000 bpd and U.S. oil production has declined since December.
Brent crude had slipped nearly 1% by late Friday morning, trading at $61.56. It’s a price level not seen since early 2021—and one that puts most OPEC+ budgets underwater. For producers already grappling with restricted output, prices below $65 are a growing fiscal headache.
The accelerated meeting follows mounting tensions within the group. Reports suggest Saudi Arabia is signaling it can live with lower prices—a not-so-subtle message to chronic overproducers like Iraq and Kazakhstan. The 411,000 bpd production increase originally floated as a wake-up call may now be cemented into policy, signaling a strategic shift in Riyadh’s approach.
OPEC+ has pledged to offset 4.57 million bpd of overproduction by mid-2026. But enforcement remains patchy. Saturday’s call will test whether Riyadh and Moscow can still steer the ship—or whether quota politics are about to devolve into a full-blown battle for market share.
Meanwhile, a Bloomberg survey released Thursday showed that OPEC’s actual output fell by 200,000 bpd in April, down to 27.24 million—contradicting the group’s planned increase. < So, can OPEC+ actually produce another 411,000 bpd???
Market pessimism is already pricing in a production hike. But April’s figures are a reminder: announced increases don’t always materialize. Whether Saudi Arabia will keep absorbing the blow while others cheat—or start using price as a weapon to enforce discipline—won’t be decided in a Vienna video call. It’ll be decided at the wellhead.
By Julianne Geiger for Oilprice.com
What's OPEC up to? - May 3
What's OPEC up to? - May 3
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: What's OPEC up to? - May 3
So, what do the oil market experts think will happen on Monday after the Paper Traders panic selloff? Which, by the way, may have already been priced in last week.
OPEC+ Stuns Market With Larger Than Expected Output Hike
By Tom Kool - May 03, 2025, 11:30 AM CDT < Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations
Crude oil markets took a fresh hit this weekend after OPEC+ stunned traders by announcing a larger-than-expected output increase for June. In a virtual meeting on Saturday, key producers led by Saudi Arabia and Russia agreed to raise collective output by 411,000 barrels per day (bpd), nearly triple the volume originally scheduled. < "Stunned" is a bit of an exaggeration since most of the oil experts already knew this was going to be discussed.
The move follows a similar surge announced for May and signals a sharp reversal from OPEC+ efforts to defend oil prices. Instead, Riyadh appears to be embracing a low-price strategy, aiming to discipline overproducing members like Kazakhstan and Iraq. Both nations have repeatedly exceeded their quotas, with Kazakhstan surpassing its March target by 422,000 bpd. < As noted in the article above, OPEC+'s April production was below the official quotas even with some cartel members over-producing.
"OPEC+ has just thrown a bombshell to the oil market," Jorge Leon of Rystad Energy told Bloomberg. "With this move, Saudi Arabia is seeking to punish lack of compliance and also ingratiate itself with President Trump."
President Donald Trump has loudly demanded lower oil prices, and with fresh tariffs rattling global markets, OPEC+ appears to be aligning with Washington’s inflation-fighting agenda. Trump is set to visit the Middle East this month, and closer energy cooperation may be on the table.
Oil prices had already been under pressure, with Brent trading near $61 a barrel on Friday, a four-year low. The OPEC+ decision sent prices tumbling another 6%, compounding bearish sentiment triggered by trade war fears and weakening economic data. < So, is this announcement by OPEC+ already priced in?
Goldman Sachs responded by slashing its December 2025 oil forecast by $5 to $66 for Brent and $62 for WTI, citing both rising OPEC+ supply and Trump’s tariff barrage. "We no longer forecast a price range," Goldman said, "because price volatility is likely to stay elevated on higher recession risk."
Standard Chartered joined the chorus of bearish revisions, slashing its 2025 Brent forecast by $16 to $61 a barrel, and trimming its 2026 outlook to $78. The bank warned that the Trump administration’s tariff-heavy approach is fueling recession fears and eroding market confidence—especially after a downbeat U.S. economic report this week. < If Brent averages $78 in 2026, then my forecasts using $75 for WTI is good.
JPMorgan also raised its global recession odds to 60% for the year, while S&P Global warned that oil demand growth could drop by as much as 500,000 bpd. < A tiny decline.
OPEC+ justified the output hike by citing "continuing healthy market fundamentals," though many see the move as an effort to assert market share and enforce compliance. Analysts like Helima Croft argue that by opening the taps, Saudi Arabia is reasserting control over rogue members while signaling readiness to let prices fall to discipline the market. < Helima Croft is a very smart women and an expert of OPEC.
The eight members behind the increase—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—will reassess in June. But for now, the message is clear: OPEC+ is no longer defending high prices, and oil markets should prepare for more volatility ahead.
By Tom Kool for Oilprice.com
------------------------------
MY TAKE:
> With U.S. oil production already on decline and lots of Venezuelan oil already off the market, the OPEC+ increase will not create a "glut" of oil.
> The Big Three petroleum inventories in the U.S. are all below normal for this time of year. U.S. Distillate inventories are 13% below normal and the U.S. needs to import a lot of black oil to make diesel. Good news for our Canadian companies that produce a lot of heavy oil (Hemisphere Energy (HME.V) and Rubellite Energy (RBY.TO)).
> If oil prices do go any lower this summer, when demand for transportation fuels always increases, it all but guarantees lower inflation and Fed interest cuts (which might be the real goal of this move). If the Fed starts lowering interest rates and the Republicans pass good income tax bill, the stock market will go a lot higher.
> What are Israel and the U.S. going to do to stop Iran from getting weapons grade uranium? It is not going to be an "agreement" with the Supreme Leader.
> Lower oil prices are actually bullish for natural gas prices.
> Lower oil prices lead to less supply, which leads to higher oil prices. I'm feeling better about my 2026 forecasts.
It is very important that you know the production mix of each upstream oil & gas company you own and what their hedging program is.
OPEC+ Stuns Market With Larger Than Expected Output Hike
By Tom Kool - May 03, 2025, 11:30 AM CDT < Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations
Crude oil markets took a fresh hit this weekend after OPEC+ stunned traders by announcing a larger-than-expected output increase for June. In a virtual meeting on Saturday, key producers led by Saudi Arabia and Russia agreed to raise collective output by 411,000 barrels per day (bpd), nearly triple the volume originally scheduled. < "Stunned" is a bit of an exaggeration since most of the oil experts already knew this was going to be discussed.
The move follows a similar surge announced for May and signals a sharp reversal from OPEC+ efforts to defend oil prices. Instead, Riyadh appears to be embracing a low-price strategy, aiming to discipline overproducing members like Kazakhstan and Iraq. Both nations have repeatedly exceeded their quotas, with Kazakhstan surpassing its March target by 422,000 bpd. < As noted in the article above, OPEC+'s April production was below the official quotas even with some cartel members over-producing.
"OPEC+ has just thrown a bombshell to the oil market," Jorge Leon of Rystad Energy told Bloomberg. "With this move, Saudi Arabia is seeking to punish lack of compliance and also ingratiate itself with President Trump."
President Donald Trump has loudly demanded lower oil prices, and with fresh tariffs rattling global markets, OPEC+ appears to be aligning with Washington’s inflation-fighting agenda. Trump is set to visit the Middle East this month, and closer energy cooperation may be on the table.
Oil prices had already been under pressure, with Brent trading near $61 a barrel on Friday, a four-year low. The OPEC+ decision sent prices tumbling another 6%, compounding bearish sentiment triggered by trade war fears and weakening economic data. < So, is this announcement by OPEC+ already priced in?
Goldman Sachs responded by slashing its December 2025 oil forecast by $5 to $66 for Brent and $62 for WTI, citing both rising OPEC+ supply and Trump’s tariff barrage. "We no longer forecast a price range," Goldman said, "because price volatility is likely to stay elevated on higher recession risk."
Standard Chartered joined the chorus of bearish revisions, slashing its 2025 Brent forecast by $16 to $61 a barrel, and trimming its 2026 outlook to $78. The bank warned that the Trump administration’s tariff-heavy approach is fueling recession fears and eroding market confidence—especially after a downbeat U.S. economic report this week. < If Brent averages $78 in 2026, then my forecasts using $75 for WTI is good.
JPMorgan also raised its global recession odds to 60% for the year, while S&P Global warned that oil demand growth could drop by as much as 500,000 bpd. < A tiny decline.
OPEC+ justified the output hike by citing "continuing healthy market fundamentals," though many see the move as an effort to assert market share and enforce compliance. Analysts like Helima Croft argue that by opening the taps, Saudi Arabia is reasserting control over rogue members while signaling readiness to let prices fall to discipline the market. < Helima Croft is a very smart women and an expert of OPEC.
The eight members behind the increase—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—will reassess in June. But for now, the message is clear: OPEC+ is no longer defending high prices, and oil markets should prepare for more volatility ahead.
By Tom Kool for Oilprice.com
------------------------------
MY TAKE:
> With U.S. oil production already on decline and lots of Venezuelan oil already off the market, the OPEC+ increase will not create a "glut" of oil.
> The Big Three petroleum inventories in the U.S. are all below normal for this time of year. U.S. Distillate inventories are 13% below normal and the U.S. needs to import a lot of black oil to make diesel. Good news for our Canadian companies that produce a lot of heavy oil (Hemisphere Energy (HME.V) and Rubellite Energy (RBY.TO)).
> If oil prices do go any lower this summer, when demand for transportation fuels always increases, it all but guarantees lower inflation and Fed interest cuts (which might be the real goal of this move). If the Fed starts lowering interest rates and the Republicans pass good income tax bill, the stock market will go a lot higher.
> What are Israel and the U.S. going to do to stop Iran from getting weapons grade uranium? It is not going to be an "agreement" with the Supreme Leader.
> Lower oil prices are actually bullish for natural gas prices.
> Lower oil prices lead to less supply, which leads to higher oil prices. I'm feeling better about my 2026 forecasts.
It is very important that you know the production mix of each upstream oil & gas company you own and what their hedging program is.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: What's OPEC up to? - May 3
HFI Research sent out their detailed take on what Saudia Arabia, which controls OPEC+, is really doing. I will be happy to send you their full analysis if you ask for it in an email to dmsteffens@comcast.net
Here is the HFI conclusion:
It (OPEC+ quotas) was never a cohesive production cut agreement from the beginning. It was always a Saudi production cut. The actual impact of the truncated production increase is more semantic than something fundamental, and those who don't understand that will continue to use this as a bearish signal, when it's really the opposite.
But as the perception of a faster-than-expected increase continues to pressure the market bearishly, energy specialists have to wait for the reality (no real supply increase) to set in. This will take time, and I think people will grow increasingly frustrated with the material disconnect that's going to take place.
So, yes, while I am saying that the production increase won't actually impact the market all that much, I am not saying to ignore the market price action implications of this. Oil will be negatively perceived because perception "trumps" reality.
There will come a time down the road when the obvious becomes obvious. That's not today, so don't be a hero.
Here is the HFI conclusion:
It (OPEC+ quotas) was never a cohesive production cut agreement from the beginning. It was always a Saudi production cut. The actual impact of the truncated production increase is more semantic than something fundamental, and those who don't understand that will continue to use this as a bearish signal, when it's really the opposite.
But as the perception of a faster-than-expected increase continues to pressure the market bearishly, energy specialists have to wait for the reality (no real supply increase) to set in. This will take time, and I think people will grow increasingly frustrated with the material disconnect that's going to take place.
So, yes, while I am saying that the production increase won't actually impact the market all that much, I am not saying to ignore the market price action implications of this. Oil will be negatively perceived because perception "trumps" reality.
There will come a time down the road when the obvious becomes obvious. That's not today, so don't be a hero.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: What's OPEC up to? - May 3
"The group of 8 (or V8), OPEC+ members who made voluntary cuts, agreed to expedite unwinding the 2.2 mb/d cuts by increasing production ceiling by 411 kb/d in May and another 411 kb/d in June. The impact is less bearish than perceived by media and market participants. This raises the production ceiling and not necessarily production. Raising production ceiling legitimizes overproduction that is already in the market. Supplies to the international market (Exports) will be significantly lower." - Anas Alhajji 5-3-2025 at 1:30 ET
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group