OPEC+ sticks to plan to ease supply cuts to July

Members and allies of the Organization of Petroleum Exporting Countries, commonly referred to as OPEC+, agreed on Tuesday to stick to a plan to gradually ease supply curbs – but wouldn’t say if that commitment would go beyond July.

Oil producers have seen a rise in demand as the global economy bounces back from the depths of a health-crisis-induced-slowdown, prompting the group to revisit a record cut in production it made last year.

With demand now bouncing back in the U.S. and China, the world’s two biggest economies, prices have risen in tandem. U.S. crude oil prices have surged 40 percent so far this year.

The combination of rising demand and higher prices could be too tempting for oil producers to pass up.

Saudi Energy Minister Prince Abdulaziz bin Salman told a virtual news conference that with the vaccine rollout now gathering pace, there is likely to be the need for “further rebalancing of the global oil market.”

But the group is being cautious not to flood the market and send prices into reverse.

At issue – the possible return of more Iranian oil if and when Tehran reaches a nuclear deal with the West that would ease sanctions. OPEC+ is set to meet again on July 1st. U.S. crude oil ended the day just shy of $68 a barrel.