There are strong indications that members of Organization of Petroleum Exporting Countries, OPEC, may increase oil supply to the international market by June.
The final decision on the volume of output to the market would be based high level talks that is currently going on among key member-countries on the possibility of increasing production as the Organization meets in June.
Concerns that Saudi Arabia and Russia could boost output have put downward pressures on oil prices, along with rising oil production in the United States.
Also, Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by some 1 million barrels per day to make up potential supply shortfalls from Venezuela and Iran.
Meanwhile, oil prices were mixed in early Asian trading today at the international market, but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply.
Specifically, Brent crude futures’ price rose 57 cents, or 0.76 percent, at $75.87 a barrel after settling at their lowest since May 8 at $75.30. The U.S. West Texas Intermediate (WTI) crude declined by 80 cents, or 1.18 percent, at $67.08 a barrel. It finished the last session at its lowest closing price since April 17 at $66.47 per barrel.
Analysts project that record crude oil volumes from the United States would head to Asia in coming months, nibbling away the market share of OPEC and Russia.
It would be recalled that U.S. oil production has surged by more than 27 percent in the last two years to 10.73 million barrels per day (bpd), thereby putting the country ahead of top exporter Saudi Arabia. But Russia pumps out more, at around 11 million bpd.
In a note, ANZ Bank observed that “investors have started pricing in the likelihood of Saudi Arabia and Russia increasing crude oil production.
“However, doubt remains, with any agreement to be finalised at the June OPEC, meeting”, the Bank added.
The OPEC members are due to meet in Vienna on June 22.