OPEC+ rumored to exempt Russia, pave way for increased production

May 31, 2022 2:42 PM ETXLE, USO, RNFTF, CO1:COMBy: SA News Team47 Comments

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  • OPEC is set to meet Thursday, with most sources indicating the group plans to stick with previously detailed production increases; just one week ago, Saudi signaled they support working with Russia as a member of the OPEC+ cartel.
  • However, Tuesday, the Wall Street Journal reported that "some OPEC members are exploring the idea of suspending Russia's participation" noting that it could "pave the way for Saudi, the UAE and other producers in the Organization of the Petroleum Exporting Countries to pump significantly more crude."
  • Russia has recently been exporting oil (USO) at rates above pre-invasion levels, and Tuesday Rosneft (OTCPK:RNFTF) shared plans to grow production this summer.
  • Few details of the discussed changes are known; however, exempting Russia would likely result in either higher production from Gulf members, or higher production from Russia, neither of which the market has been anticipating.
  • Oil (CO1:COM) quickly traded lower following the report, though prices remain above Friday's close (XLE).

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