The market has seen some extreme volatility this week. Some of it was due to OPEC’s internal politics and the way the cartel chose to resolve the recent production impasse. Lack of clarity over demand signals has been an additional catalyst.
Here’s what it might all mean for prices.
On Sunday, OPEC+ met via videoconference and resolved remaining from its failed July 1 meeting.
Below, what the group agreed to do regarding oil production:
Increase production by 400,000 bpd per month starting in August. This will mean an additional 2 million bpd of OPEC+ pumped by December, 2021 as compared to this month.
The 400,000 bpd monthly increases will continue until 5.8 million bpd is returned to the market, which would bring us to September, 2022 if changes are not made at some later point. By then, OPEC+ would have reintroduced all of the 9.7 million bpd of oil production that it stopped in the spring of 2020.
In addition, starting...read more...