Given this situation, it is difficult to conceive that Kazakhstan limits the production of oil as planned, much less than compensates for the current overproduction with larger production cuts, says Carsten Fritsch, commerzbank raw material analyst.
Tensions increase while OPEC+ contemplates more production increases
“According to the declaration of the Minister of Energy, Kazakhstan is still considered part of the OPEC+ and is committed to cooperate constructively and to fulfill its obligations. However, the other OPEC+ countries will not want to be left alone in words, as evidenced by the expansion of increased production already agreed in May and the increase in additional production that is now being considered for June.”
“These decisions are probably motivated by the fact that Kazakhstan is constantly overcoming its agreed production volumes. If Kazakhstan continues to violate the OPEC+agreement, this could result in an additional increase in production by the other countries by anger, which would exert more pressure on oil prices.”
“Therefore, the question also arises from whether Kazakhstan’s permanence in OPEC+ could do more damage than well. In recent years, Angola and Qatar have left the OPEC because the membership no longer adjusted to their respective interests. These exits did not have negative consequences for OPEC.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
