The recent decision by OPEC+ members to extend production cuts underscores their concern over the strength of market fundamentals, evidenced by the increase in global crude oil inventories.

At the June 2 meeting, OPEC+ was widely expected to maintain its policy of reducing supply to support oil prices. 

After a steady rise in the first quarter of 2024, oil prices have been stuck in a tight range the last few weeks without a clear narrative to provide direction.

There has been no shortage of stories involving geopolitics, OPEC+ policy, US sanctions, interest rates and China’s economy, but collectively the signals are mixed.

This marks a turnaround from the rally that defined the first three months of the year.

some forecasters predicting the price of oil could hit $200 a barrel.

On the other hand, there is hope that production increases elsewhere (e.g., US, Saudi Arabia, Venezuela, Iran) could offset Russian declines. Or, perhaps, that won’t even be necessary if Russia can still find international buyers willing to buy its oil.

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