The news from the weekend from OPEC+ meeting, raising oil output more than expected:
OPEC+ to raise output by 548,000 bpd in August vs 411,000 bpd in July
In effect, the decision returns nearly 80% of the 2.2 million bpd
voluntary cuts from eight OPEC producers back in the market
actual output increase has been smaller than planned so farmost of the supply has been from Saudi Arabia
OPEC+ cited
steady global economic outlookhealthy
market fundamentalslow oil inventories
as reasons
for releasing more oil.
Analysts have responded with:
increased production represents a more
aggressive competition for market shareOPEC+ showing some tolerance for
the resulting decline in both prices and revenue
The price response:
Oil prices fell just over 1% at the Globex open on Sunday evening US time
Goldman Sachs expects an slightly bigger boost at the next meeting, scheduled for August 3:
expect a final 550,000
bpd increase for September
Update:
This article was written by Eamonn Sheridan at www.forexlive.com.