{"id":16438,"date":"2023-05-31T20:18:39","date_gmt":"2023-06-01T00:18:39","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/will-opec-announce-more-output-cuts-analysts-have-their-say\/"},"modified":"2023-05-31T20:18:40","modified_gmt":"2023-06-01T00:18:40","slug":"will-opec-announce-more-output-cuts-analysts-have-their-say","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=16438","title":{"rendered":"Will OPEC+ announce more output cuts? Analysts have their say"},"content":{"rendered":"
\n

(Reuters) – The Organization of the Petroleum Exporting Countries with Russia and other allies, or OPEC+, meet on June 4 to discuss whether additional oil production cuts should be implemented. <\/p>\n

The group in early April surprised markets with output cuts of around 1.16 million barrels per day, fuelling a rise in prices. <\/p>\n

But going into the meeting this weekend, OPEC+ has given mixed signals on whether further cuts are likely, keeping oil prices volatile recently. [O\/R]\n

Here is what analysts expect in terms of the meeting’s outcome: <\/p>\n

Goldman Sachs (NYSE:):<\/p>\n

* “We expect the nine major OPEC+ producers which announced voluntary production cuts in April to keep production unchanged, but utilize some partly offsetting hawkish rhetoric.”<\/p>\n

Elevated OPEC pricing power should allow the group to deliver additional cuts if oil prices were to remain below $80 per barrel in the second half of the year, the bank added. <\/p>\n

HSBC: <\/p>\n

* “We think OPEC+ will wait to see the impact of the latest series of cuts before making any further changes to supply.”<\/p>\n

“We continue to think OPEC+ will take a flexible approach \u2013 if the expected deficit does not materialise in the summer, we could see further cuts from the organisation.” <\/p>\n

HSBC expects the current set of cuts, in addition to the stronger oil demand from China and the West from the summer onward, will bring about a deficit in the market in the second half of 2023.<\/p>\n

Viktor Katona, lead crude analyst at Kpler: <\/p>\n

* “We think OPEC+ is forced to react and one way or another will be inclined to cut.” <\/p>\n

“There’s a big elephant in the room, namely that supply\/demand balances will be the tightest in July-August and cutting production into months that anyways see almost 3 million bpd of a discrepancy between strong demand and declining supply is difficult to sell from a fundamental perspective.”<\/p>\n

However, OPEC+ needs the market to realize that fundamentals matter and not everything boils down to pure macro signals, Katona added. <\/p>\n

RaboBank:<\/p>\n

* “We see OPEC+ staying the course and continuing the April cuts … The surprise April cut boosted prices by $5-$7 for about three weeks.”<\/p>\n

“A second cut would display their fears more openly and indicates greater weakness; we construe a second cut as a bearish signal unless the cuts are extremely substantive.”<\/p>\n

Amarpreet Singh, analyst at Barclays <\/span><\/span> (LON:): <\/p>\n

* OPEC+ will “likely remain proactive with a primary goal of avoiding a sustained surplus, in our view, as the sharp increase in inventory cover and ensuing further deterioration in sentiment might lead to a significant increase in volatility.”<\/p>\n

“We forecast a supply deficit in the second half of the year as non-OPEC+ supply growth decelerates and OPEC+ countries restrain output amid a seasonal boost in demand,” Singh wrote in a note. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

(Reuters) – The Organization of the Petroleum Exporting Countries with Russia and other allies, or OPEC+, meet on June 4 to discuss whether additional oil production cuts should be implemented. The group in early April surprised markets with output cuts of around 1.16 million barrels per day, fuelling a rise in prices. But going into […]<\/p>\n","protected":false},"author":1,"featured_media":16439,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-16438","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nWill OPEC+ announce more output cuts? 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