Bloomberg is reporting, according to a 'delegate' that OPEC+ will proceed with plans to revive halted oil production after repeated delays, amid pressure from President Donald Trump to lower oil prices.
The surprise move - which immediately sent crude prices reeling - means the group led by Saudi Arabia and Russia will go ahead with the increase of 138,000 barrels a day in April (again, according to the delegate).
Bloomberg notes that crude traders had widely expected that OPEC+ would once again delay the restart, which it had postponed three times since first announcing a supply roadmap last June.
“The optics around any reinstatement of supply, even if incremental and small, will be seen as price-negative,” Harry Tchilinguirian, head of oil research at Onyx Commodities Ltd., told Bloomberg before the decision.
Crude prices immediately plunged back below $70 (WTI) on the headline...
..taking out 2025 lows...
The group’s choice may be yet another illustration of the sway of Trump, who last month called on OPEC to “cut the price of oil.”
Additionally, Trump’s renewed “maximum pressure” on Iranian exports could create a gap for other OPEC+ nations to fill.
OPEC’s decision implies “that the alliance is feeling the pressure of underproduction and concessions of market share to the highest cost producer: the US,” said Joe DeLaura, a former trader and global energy strategist with Rabobank.
It wouldn't be the first time that a headline was run ahead of an OPEC+ meeting to run stops, and we wonder what's the over/under on the timing of an official OPEC+ denial.
