Goldman Sachs analysts have reportedly suggested that OPEC+ is likely to pause further oil production increases due to deteriorating global economic conditions. Goldman reportedly anticipates that OPEC+ will make a “final” decision in July to raise daily output by 411,000 barrels, but actual economic data may prompt a reassessment, according to @FirstSquawk, and lead to a halt beyond that.
Wall Street banks are racing this week to slash their oil price forecasts for 2025 and 2026 after OPEC+ threw another curveball at the market this weekend by vowing to continue raising production by more than initially planned.
Commodity strategists and analysts from major U.S. and European investment banks have issued notes with downgraded oil price forecasts for 2025 and 2026 since OPEC+ producers led by Saudi Arabia and Russia agreed on Saturday to raise collective output by 411,000 barrels per day (bpd), nearly triple the volume originally scheduled.
Oil dropped after OPEC+ agreed to another large output increase, raising concern that additional supply could lead to a global glut just as the trade war threatens demand.
West Texas Intermediate futures fell 2% to settle just above $57 a barrel, a fresh four-year low for the closing price. OPEC and its allies agreed on Saturday to continue loosening supply constraints as the group’s leaders seek to punish overproducing members and win back market share.
The U.S. stock markets enjoyed a broad rally on Wednesday, with the S&P 500 jumping nearly 2% a day after U.S. President Donald Trump announced that China tariffs will come down substantially, with another potential boost coming from a Wednesday Reuters report citing unnamed sources as saying talks to lead to significant tariff reductions.
OPEC+’s audacious bid to punish its oil-quota cheats prompted a renewed plunge in crude on Wednesday, as growing tensions with Kazakhstan stoked fears of an escalating price war.
Oil markets have been jittery since early April, when the producers’ group led by Saudi Arabia stunned traders by accelerating the revival in its output. This was an apparent effort to discipline over-producing members by driving down prices, yet Kazakhstan — the greatest offender — has continued to pump as usual at its biggest fields.
West Texas Intermediate futures added 1.9% to settle near $62.50 a barrel, the third gain in the four past sessions, after China signaled openness to trade negotiations with the Trump administration. Pre-conditions for the talks would include a more consistent US position and a willingness to address China’s concerns around American sanctions and Taiwan, according to a person familiar with the Chinese government’s thinking.
While Iraq and Russia made a small amount of progress, it was dwarfed by overproduction in habitual quota-violator Kazakhstan, where the backlog expanded by more than 40%. OPEC+ delegates have said that Astana’s persistent offending motivated last month’s surprise policy shift that raised production faster than expected, as Riyadh seeks to discipline the cheats with lower oil prices.
Last week, eight OPEC+ countries announced they would phase-out voluntary oil output cuts by ramping up output by 411,000 barrels per day in May–equivalent to three monthly increments. In other words, the Saudis are signaling they might be willing to give up their long-time role as OPEC’s swing producer in an attempt to take a tougher stance against countries that continue to violate the output pact, most notably Kazakhstan, the UAE and Iraq.
OPEC+ agreed to make a larger than expected oil supply hike in May, adding the equivalent of three monthly tranches from its previous plan to revive output.
The group led by Saudi Arabia and Russia will add 411,000 barrels a day to the market next month, according to a statement posted on the OPEC website. The decision followed a conference call between ministers on Thursday that was focused on member countries that had been consistently exceeding their quotas, delegates said, asking not to be identified as the talks were private.
OPEC’s heavyweights Saudi Arabia, Iraq, the United Arab Emirates (UAE), and Kuwait, as well as Oman (not an OPEC producer but an OPEC+ member) exported on average 5.51 million barrels per day (bpd) of refined petroleum products in 2024, up by more than 7% on the year, per the data.