OPEC+ agrees to ease production cuts, oil prices soften

London (Quantum Commodity Intelligence) - The OPEC+ producer group has agreed to start softening production curbs Thursday, increasing output by 350,000 barrels per day (bpd) in May, 350,000 bpd in June, and a further 400,000 bpd for July.

Meanwhile, Saudi Arabia announced it will start phasing out its extra 1 million bpd voluntary output cuts by July.

Under the terms of the new OPEC+ deal, cuts implemented by the group would be just above 6.5 million bpd from May.

Most analysts think the group are banking on a stronger than normal seasonal improvement in demand, placing emphasis on major vaccine progress in key consuming regions such as the U.S. and Asia.

Russian Deputy Prime Minister Novak said in the meeting that he expected global oil demand to grow by 5-5.5 million barrels per day (bpd) this year.

Oil prices retreated on the news as the new front-month June Brent contract eased below $65/b, continuing the recent downwards trend.