OPEC+ Sticks to its Plans

In this week’s Rigzone market commentary, Matthew V. Veazey at Rigzone discusses key supply-related factors supporting strong crude prices. Featured in this conversation was Validere’s Mark Le Dain, along with Jon Donnel at B. Riley Advisory Services, Barani Krishnan at Investing.com, and Tom Seng at the University of Tulsa’s Collins College of Business. 

This week OPEC+ postponed its scheduled meeting until early June, meaning that the planned production increase of 350,000 bpd for May and June is a go. Since April 2020, OPEC+ has withheld at least 7 million bpd in output. This marks the group’s first significant production increase since then. 

This announcement comes as a surprise given the rising COVID cases across the globe, particularly in India, the third-largest oil buyer, and Japan, the fourth largest crude importer. The market took the news as a positive sign of overall demand outlook. 

Validere’s Mark Le Dain adds some colour around other bullish signals of the week, particularly Vitol’s announcement of plans to purchase Hunt Oil Co.’s Permian Basin oil wells. This deal could be upwards of $1B and would be the global firm’s first U.S. shale purchase. 

Check out the full story here.

Tamara Teofanovic