OPEC+ voluntary eight agree to further crude quota hike in June

OPEC+ countries implementing voluntary production cuts agreed May 3 to increase crude quotas more than planned in June – the second month in a row that they will accelerate easing their combined 2.2 million b/d of cuts.

OPEC said in a statement that in view of "current healthy market fundamentals, as reflected in the low oil inventories", the eight countries will now increase output by 411,000 b/d in June.

"The gradual increases may be paused or reversed, subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability," OPEC said.

Analysts had expected the group -- which comprises Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman -- to raise quotas, citing ongoing frustration with persistent overproducers as well as a recent shift in strategy from supporting prices to defending market share.

The decision to bring more barrels back to the market comes as prices hit multi-year lows. Platts, part of S&P Global Commodity Insights, assessed Dated Brent at $61.405/b on May 2 -- the lowest level since April 2021.

Prices have tumbled since US President Donald Trump returned to office in January, with his aggressive trade policies and tariffs leading to fears of a global economic slowdown and a drop in oil demand.

The group of eight voluntary cutters will next meet on June 1 to discuss output policy for July, OPEC said.

The June quota increases could be offset by compensation cuts pledged by all members of the 'group of 8' apart from Algeria, which has consistently met its target. The latest compensation plan schedule published by OPEC indicated that they will cut a combined 431,000 b/d in June. Overproducers have struggled to meet these targets in the past.

A full OPEC+ ministerial meeting is scheduled for May 28, when ministers will discuss market conditions and the voluntary cuts, as well as groupwide cuts of 3.6 million b/d, in place until the end of 2026.

OPEC+ shifting strategy is likely to prove popular with Trump, who has urged OPEC to boost crude production to bring down prices. Trump is due to visit Saudi Arabia and the UAE during a state visit to the region May 13-16.