“That is so little as to be meaningless. From a physical standpoint it is a marginal blip. As a political gesture it is almost insulting,” Eurasia Group’s Raad Alkadiri said of OPEC’s decision on Aug. 3 to raise oil output by 100,000 bbl/d.
OPEC+ decided at its meeting on Aug. 3 to raise its oil output target by 100,000 bbl/d, only a 0.1% raise as oil prices begin to stabilize.
“There’s nothing good in this report for anybody unless you’re waiting for things to fall apart and to be a buyer on the downside,” Bob Yawger, director of energy futures at Mizuho, said of the EIA report.
The increase of 100,000 bbl/d announced by the producer group on Aug. 3 will be one of the smallest since OPEC quotas were introduced in 1982, OPEC data shows.
“The work is ongoing to make [oil] prices more realistic,” said Bolat Akchulakov, energy minister of OPEC+ member Kazakhstan. “We have always said that the corridor of $60-$80 per barrel is a normal one... And today the price is $100.”
The U.S. Strategic Petroleum Reserve (SPR) held about 618 million barrels last September and its stocks have declined due to sales from congressional mandates and Biden’s price initiative.
OPEC+'s annual meeting will further discuss a potential hike in crude supply later this week.
Stratas Advisors expects oil prices will be under pressure for the upcoming week from the weakening economic outlook as the latest GDP numbers for the U.S. confirm the firm’s view that the U.S. economy has been slowing down.
New Mexico output fell 0.7% to 1.5 million bbl/d in May, lowest since March. Output in Texas fell 1% to 5 million bbl/d in May, lowest since February.
"The focus is slightly shifting away from supply disruptions towards crude demand destruction due to global recessionary fears," OANDA's Edward Moya said in a survey of analysts and economists on the forecast of crude oil.