TD have a note out on what they expect from this week's OPEC-plus meeting (if you think of OPEC+ as Suadi + Russia you won't be too far off the mark).
- With the OPEC+ production increases running their course in July, this week's meeting is garnering plenty of attention as to what the next steps will be for the cartel
- We expect the cartel will increase production once again but will ultimately maintain a cautious approach that may only satisfy a portion of the expected deficits this summer
Huh. A 'cautious' approach like this makes sense if producers want to keep prices at these sorts of high levels. Caution is also warranted given the nature of the demand recovery, which is subject to setbacks if COVID-19 outbreaks should once again rise, the 'Delta' variant is of particular concerns as it seems more transmissible.
Central estimates for the supply increase are circa +0.5m bbls/day, the fresh output kicking in from August.
