OPEC Weighs Further Oil Output Hike — Bloomberg

Members of the Organization of Petroleum Exporting Countries (OPEC) are discussing the possibility of a third consecutive increase in oil production, Orda.kz reports, citing Bloomberg.

A key proposal to be reviewed at the cartel’s next meeting on June 1 is a boost of 411,000 barrels per day in July, triple the volume expected initially. However, no final agreement has been reached within the group.

Previously, OPEC raised output by the same amount in May and June. These decisions were followed by a sharp drop in oil prices, which the group has long sought to keep elevated.

On Thursday, oil fell another 0.9%, reaching $64.31 per barrel. Bloomberg notes that Saudi Arabia, part of OPEC, cautioned Kazakhstan and Iraq at their previous meeting that it may boost its production if they don't comply with their quotas. 

Despite these warnings, Kazakhstan has limited efforts to curb the activities of international oil companies operating within its borders and continues to export oil at levels close to record highs.

Of the 32 analysts surveyed by Bloomberg, 25 believe OPEC will approve a 411,000-barrel-per-day increase in July. If adopted, the decision could ease pressure on Kazakhstan, where output has surged due to expanded capacity at the Tengiz field and now significantly exceeds the country’s assigned quota.

However, a further price decline could undermine economic gains from rising exports. Despite higher production, Kazakhstan’s crude export revenue has been decreasing.

Original Author: Nikita Drobny