In response to surging oil prices and market speculation, OPEC+ delegates are considering maintaining voluntary production cuts during their upcoming meeting on Sunday. A recent Reuters report reveals that the case for continued cuts is bolstered by the steady rise in global inventories, with preliminary data indicating a significant increase in OECD inventories both month-on-month and year-over-year.
According to OPEC+ delegates, the rise in global inventories, totaling 20 million barrels in the month and 34 million barrels annually, is raising concerns within the organization. While the debate during the meeting is expected to center around demand and supply forecasts, particularly in anticipation of the upcoming driving season, the noticeable increase in inventories provides a compelling reason for OPEC+ to consider extending production cuts.
The potential extension of production cuts comes amid efforts to stabilize oil markets and counteract the recent surge in prices. With both OPEC+ and US producers showing signs of discipline, the decision to prolong cuts could serve as a means to tighten the market and alleviate concerns over inventory levels, offering a glimpse into the ongoing dynamics shaping global oil policies.
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