OPEC+ may continue to increase production: Sources say that in July, it may increase capacity to three times the originally planned amount.

This week, crude oil prices partially pulled back due to a comprehensive increase in crude oil inventory reported by the US Energy Information Administration, coupled with the expectation of rapid progress in nuclear talks between the US and Iran, which could unlock Iran's oil capacity.

However, sources told the media that at the OPEC+ meeting in early June, representatives of member countries may decide to increase oil production in July, marking the third consecutive increase this year.

It is reported that the scale of this production increase may be 411,000 barrels per day, three times the initial plan. However, this proposal is still under discussion, and member country representatives have not yet made a formal decision.

Nevertheless, this news is clearly not in line with OPEC+'s ongoing efforts to defend the price "wall" in the oil market. Some have also pointed out that continuing to increase production to suppress oil prices is, on the one hand, a move by OPEC+ to rein in overproducing member countries and reclaim market share, and on the other hand, an attempt to curry favor with US President Trump.

Pessimistic Views

Saudi Arabia has previously warned member countries such as Kazakhstan and Iraq about overproduction. However, so far, these countries have only made verbal commitments without taking concrete actions. This may be one reason why Saudi Arabia hopes to continue pushing for increased production.

On the other hand, as Saudi Arabia, the UAE, and Qatar recently reached investment agreements worth hundreds of billions of US dollars with US President Trump during his visit to the Middle East, these three countries, which hold significant shares in the OPEC+ organization, may also wish to further curry favor with the US government by cooperating to continue lowering oil prices.

The market currently holds a relatively pessimistic view on crude oil prices. In addition to production increases, whether demand can recover remains a key concern for analysts. This is also highly correlated with Trump's trade policies. Analysts are closely monitoring the dampening effect of tariffs on global economic growth to determine whether crude oil will see a rebound in demand in the coming days.

However, Hiroyuki Kikukawa, an analyst at Nissan Securities, told the media that given the upcoming US Memorial Day, which marks the start of the summer travel season and drives a surge in US driving demand, there is limited room for further oil price declines this month.

In addition, geopolitical factors will continue to disrupt the market. News suggests that if US-Iran talks fail, Israel may swiftly attack Iran. In Africa, according to a government letter, the Sudanese military is preparing to close Port Sudan due to internal conflicts, and this port is the most important channel for neighboring South Sudan to export oil.