The markets shrugged at the historic meeting between President Trump and North Korean dictator Kim Jong Un. Both sides hailed the summit as a breakthrough, with a pledge towards denuclearization, but as expected, there was a lack of even the most basic details on how they might get there. Oil was flat at the start of Tuesday, reports OilPrice.com.
Opposition to an increase in the OPEC/non-OPEC production limits continues to grow, with Iraq coming out against such a move. OPEC’s second largest producer said that the production cuts have not yet achieved the intended objective of balancing the oil market.
“Producers from within and outside OPEC have not yet reached the goals set,” Iraq’s oil minister Jabbar al-Luaibi said in a statement. Iraq “rejects unilateral decisions made by some producers which do not consult with the rest.”
He went on to add: “We shouldn’t exaggerate the need of the oil market for more oil at the present time, and which could cause great damage to global markets.”
The statement of opposition comes after Iran and Venezuela also called upon the group to keep the limits in place. The open resistance from a growing number of OPEC members to what seems to be a likely outcome (a softening of the production curbs) is setting the stage for a contentious meeting.
Despite opposition from some OPEC members, the two most important producers, Saudi Arabia and Russia, are already signaling their intent to raise output. Saudi Arabia also added production last month, which, marking a significant change in strategy. OPEC’s secondary sources said Saudi Arabia increased production by 85,000 bpd in May while the Saudis themselves said production rose by 161,000 bpd. Russia also increased output at the beginning of June from 10.95 million barrels per day to 11.09 mb/d. The data suggests the two producers are laying the groundwork for higher output.
