Brent hit its highest since 2018 in a context where tight market signals continue. US inventories fell for the fifth consecutive week, Chinese inventories appear to be at their lowest of the year. US implied demand for gasoline and oil is strengthening and the 1-year curve is in strong backwardation. In light of these factors and the rise in prices, according to some delegates, OPEC+ would seem intent on deciding at its 1 July meeting to increase production by 500,000 b/d in August. The intention seems to be confirmed by the Saudi statement that producers have a role in “taming and limiting inflationary pressures”. Industrial metals rose yesterday, although profit-taking is ongoing this morning. Going forward, it will be necessary to monitor whether or not the pace of China’s reserve sales is altered, also given that the announcement has so far not had the effect the authorities had hoped for.
OPEC+ – 28 June 2021
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