Crude oil prices rose earlier today ahead of the OPEC+ meeting scheduled for Sunday. Most analysts anticipate that the group will maintain production cuts of approximately 2.2 million barrels per day throughout the second half of the year.
Brent crude surpassed $84 per barrel earlier, while West Texas Intermediate gained over $1 to exceed $80 per barrel. Analysts suggest that OPEC+’s ongoing production control will help stabilise a market that appears to be oversupplied.
Sugandha Sachdeva from India-based consultancy SS WealthStreet told Reuters, “Furthermore, the onset of the summer driving season in the U.S. spurs a seasonal uptick in consumption and typically aids a positive momentum in crude oil prices.”
Early travel data for Memorial Day weekend indicate a bullish outlook for prices. ANZ analysts noted, “Initial data suggest a relatively high number of U.S. holiday trips have been taken over the Memorial Day holiday, the traditional start of the driving season. Air travel has also been strong,” as quoted by Reuters.
In other developments, Warren Patterson and Ewa Manthey from ING highlighted a production outage at the Buzzard field in the UK’s North Sea, reported by operator CNOOC this week. The Buzzard field, the largest source of Forties crude in the Brent crude benchmark, has a production capacity of 80,000 barrels per day.
Regarding the upcoming OPEC+ meeting, Patterson and Manthey wrote, “Members are expected to fully roll over their additional voluntary cuts. High expectations of a full rollover mean that OPEC+ needs to ensure it does not disappoint the market, otherwise, it risks an aggressive pullback in prices.”
Additional factors contributing to the rise in oil prices include reports of a Houthi attack on a ship in the Red Sea and the ongoing Israel-Hamas conflict.
Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.
