OPEC+ Expected To Maintain Production Hike For July

OPEC+ is set to again resist Western calls to raise oil production targets and maintain the scheduled hike of 432,000bpd for July at the June 2 ministerial, according to Reuters.

• Western leaders have repeatedly asked the group to accelerate its output hikes and there had been some optimism in the West that a recent US charm offensive on Saudi Arabia might persuade the Kingdom to increase production.
• Axios wrote this week that the US has been secretly brokering a deal between Riyadh and Cairo to transfer two strategically significant Red Sea islands from Egyptian to Saudi sovereignty.
• There was expectation that this deal, along with a visit from CIA chief William Burns last month, may have been laying the groundwork for a Saudi visit from US President Joe Biden and a restoration of relations between the White House and de facto Saudi leader Mohammad Bin Salman. The White House likely assumed that the restoration of full diplomatic relations with the Saudi Crown Prince would provide the US with greater influence over Saudi production.
• Saudi Foreign Minister Prince Faisal bin Farhan said this week at Davos: 'It’s much more complex than just bringing barrels to the market. Our assessment is that actually oil supply right now is relatively in balance.'
• Saudi and UAE spox have also argued that pumping more crude would do little to ease the market because refineries are running at full capacity due to underinvestment.