OPEC+ maintains production plan

Speaking after OPEC+ announced its decision this afternoon, Ann-Louise Hittle, vice president, Macro Oils, said: "As we expected, OPEC+ is holding firm to its decision to increase supply, gradually and carefully, over the coming months.

"The move comes as the group tries to balance risks – including  the possibility of reduced demand from India as it struggles to control a devastating wave of Covid-19 infections – with signs of demand recovery elsewhere.

"US oil demand is continuing to climb back toward 2019 pre-pandemic levels and a strong summer demand season is nearly certain, given the progress in its vaccination programme over the last few months."

Wood Mackenzie forecasts global liquids demand to rise by 6 million barrels per day (b/d) year-on-year after a steep 10 million b/d drop in 2020.

Hittle added: "The group will increase output incrementally each month in May, June and July, along with a gradual easing of Saudi Arabia’s additional production cut of 1 million b/d.

"However, OPEC+ will need to weigh the risk of weaker-than-expected demand recovery  over the next three months.

"Another large risk to prices would be if the Iran-US talks to restore the JCPOA (Iran nuclear deal) were successful."