The Organization of the Petroleum Exporting Countries and its partners (OPEC+) will meet early next month to review the current voluntary production cuts, and UBS expected the oil producers to agree to an extension of the programme in order to maintain the balance of the oil market, foreign media reported.
UBS wrote in a report that oil inventories have fallen slower than the bank expected in recent weeks, and that keeping US interest rates high for a longer period of time will likely affect OPEC+'s ability to adopt proactive, pre-emptive and precautionary policies. The broker expected oil producers to decide to extend their voluntary production cuts for at least three months before the start of the ordinary meeting in June. The broker also expected OPEC+ to use three independent sources of information to review the production capacity of all member countries as a basis for discussing an extension when the declaration of cooperation on production cuts expires at the end of the year.
UBS maintained a moderately positive outlook for crude oil prices in the coming months, supported by healthy demand and OPEC+'s actions to keep the oil market in balance.
