Fundamentals and Market Sentiment to Impact OPEC: Energy Intelligence

The latest OPEC+ production cut at the start of April has raised questions about how the group will manage the market in the months to come and what parameters will guide its decision-making amid a fragile global economy according to Energy Intelligence.

• Supply/demand fundamentals will still form the foundation for assessments but OPEC+ is increasingly factoring in the impact of market sentiment.
• The 2 Apr cut announcement came at a time when oil prices were rebounding to nearly 80$/bbl and reflects this shift toward pre-emptive action.
• The next full OPEC+ meeting is scheduled for 4 June 2023.
• Front month Brent gained about 7.5$/bbl in early April following the announcement but has since lost all those gains with concern for the economy and further central bank rate hikes. Uncertainty over the recovery in China and stronger than expected Russian exports are adding to the downside pressure.
  • Brent JUL 23 down -1.9% at 78.77$/bbl
  • WTI JUN 23 down -2.2% at 75.12$/bbl