OPEC+ Will Drive Oil Prices Over Coming Months

OPEC+ Will Drive Oil Prices Over Coming Months

A 3D printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration

The OPEC+ cartel’s production policy will be the main factor influencing oil prices over the coming months, according to Vitol Group.

There’s little chance of Iranian barrels returning to global markets this year and US shale producers aren’t investing enough to raise output quickly, the world’s largest independent oil trader said, according to Bloomberg.

“Control of pricing is very much in the hands of OPEC+,” Mike Muller, the head of Asia for Vitol, said on a Sunday webinar hosted by Dubai-based consultancy Gulf Intelligence. In the US, “the rig count is simply not there for production to catch up in a way that would be necessary if you needed extra oil.”

The Organization of Petroleum Exporting Countries and its partners -- a 23-nation grouping led by Saudi Arabia and Russia -- meet on Monday. With Brent crude climbing above $80 a barrel last week for the first time since 2018, some traders have called on OPEC+ to announce faster-than-planned production increases.

The group is gradually easing cuts that began as the coronavirus pandemic ravaged energy markets last year. It has previously signaled