Morning Highlights: OPEC+ Hike Triggers Oil Price Decline , Surplus Fears Build

Market Snapshot (as of 06:30 EST)

🔻 Brent: $60.46/b (−$0.83)

🔻 WTI: $57.44/b (−$0.85)

📉 Today's Themes:

• OPEC+ hikes output again—adding 411k bpd in June

• Total Q2 increase now 960k bpd, a 44% rollback of prior cuts

• Saudi Arabia pushes for faster unwinding to punish quota-busters

• Recession fears persist as demand outlook remains murky

• Banks lower crude forecasts amid weak fundamentals

📰 Key Drivers:

🔸 OPEC+ Turns Up the Taps

Eight OPEC+ countries will raise output again in June—totaling nearly 1 million bpd added in Q2. That’s a sharp reversal from voluntary cuts agreed in 2022. The pressure is reportedly coming from Saudi Arabia, aiming to enforce discipline on Iraq and Kazakhstan.

🔸 Saudi Arabia’s Dual Strategy

Riyadh is walking a fine line—pushing for more supply while still producing below full quota. Analysts see this as a bid to challenge both U.S. shale and noncompliant OPEC+ members, though it risks undercutting prices during weak demand.

🔸 Market Structure Weakens

Brent’s front-month premium vs. 6-month futures narrowed to just $0.10. Briefly flipped into contango earlier today—the first time since Dec 2023—signaling growing concern about oversupply.

🔸 Analysts Cut Price Forecasts

Barclays slashed its Brent forecast by $4 to $66/b for 2025. ING now sees $65 average for 2024, down from $70. Consensus is that OPEC+ policy uncertainty and trade risks are both hitting sentiment.

🔸 Inventory Overhang Grows

Vortexa data shows a 150 million barrel build in global onshore and offshore crude stocks since mid-Feb. Demand, especially in Asia, remains soft.

📢 Saxo Bank’s Ole Hansen: “Adding barrels into an economic slowdown will weigh on prices until we have a clearer picture on the demand impact.”

📢 ING: “Supply-side clarity just got muddier—market now has to contend with both OPEC+ politics and global macro headwinds.”