OPEC+ Boosts Output in July and Keeps Market Guessing Beyond - Bloomberg video

OPEC+ Boosts Output in July and Keeps Market Guessing Beyond - Bloomberg

OPEC+ stuck to its plan to hike oil output in July, but Saudi Arabia’s energy minister kept the market guessing as to whether the group will add more supply later this year to keep pace with the accelerating global recovery.

“The demand picture has shown clear signs of improvement,” Saudi Energy Minister Prince Abdulaziz bin Salman said, in some of his most upbeat comments since the crash last year. But pressed on whether more supply increases will be needed, he said: “I will believe it when I see it.”

With oil prices rising above $70 and demand for gasoline and diesel increasing in the U.S., China and Europe, OPEC+ is now at the center of one of the most pressing debates in markets: the threat of inflation.

OPEC and its allies have spent more than a year rescuing prices from historic lows and only cautiously adding supply. Now the story is shifting: the oil market is heading into deficit.

Letting the market overheat risks undermining the recovery. But the cartel also has to manage the dual risks of Iranian supply coming back online and any resurgence in the virus and its variants.

“Covid-19 is a persistent and unpredictable foe, and vicious mutations remain a threat,” OPEC Secretary-General Mohammad Barkindo said.