OPEC+ Sticks To Production Increase Plan


OPEC+ ministers appear to have held their meeting which was scheduled for today early, with OPEC publishing a press release that the group met on Tuesday. However, the surprises end there, with the group deciding to stick to their plan of gradually increasing oil output between May and the end of July. This easing will see around 2.1MMbbls/d of supply brought back onto the market over this period. While there is concern over the Covid-19 situation in India, the group still believes that we will see a strong recovery in the second half of this year. In addition, our balance sheet continues to show that the market will be able to easily absorb this additional supply from OPEC+. The group is next set to meet on 1 June, and so they can reassess the demand situation then, and decide whether there is any need to slow the pace of easing output cuts.

Away from OPEC+, and the API released US inventory numbers overnight which showed that US crude oil inventories increased by 4.32MMbbls over the last week, which is quite a bit different from the roughly 1MMbbls drawdown that the market was expecting. Despite this surprise build, the market is holding up fairly well in early morning trading today. Looking at refined products, the API reported drawdowns of 1.29MMbbls and 2.42MMbbls in gasoline and distillate fuel oil respectively. The more widely followed EIA report will be released later today.


The metals complex extended gains for a third consecutive session supported by continued macro-optimism, while gold prices traded in a tight range ahead of this week’s Federal Reserve meeting. LME copper extended its upward rally with prices rising as much as 2.2% to hit an intra-day high of US$9,965/t (highest since 2011). Also, nickel, the recent laggard among LME base metals, also extended gains yesterday, with the three-month price trading to an intra-day high of US$16,995/t.

The latest LME Commitment of Traders Report (COTR) released yesterday showed that investors have increased their net bullish positions in copper to the highest level in seven weeks, primarily driven by the bullish sentiment towards tightening supply conditions. Similarly, zinc and aluminum also saw increased interest; reflecting a broader return of risk appetite to industrial metals over the last week.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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