Goldman Sachs Expects Another OPEC+ Superhike in September
The OPEC+ producers are expected in August to agree on another superhike in production for September that would complete the unwinding of the 2.2 million barrels per day (bpd) output cuts, Goldman Sachs said after the alliance surprised the market with a larger-than-forecast boost for August. The OPEC+ group is set to unwind the last 550,000 bpd of the 2.2-million-bpd cut in September, the investment bank said in a weekend note. On Saturday, the eight OPEC+ producers withholding supply to the market decided to ramp up oil production more aggressively than anticipated in August. At the virtual meeting Saturday, the eight core members led by Saudi Arabia agreed to add 548,000 bpd to global supply—exceeding earlier expectations of a 411,000 bpd hike. The move sets the bloc on track to fully unwind 2.2 million bpd of prior cuts nearly a year ahead of schedule. “Saturday’s announcement to accelerate supply hikes increases our confidence that the shift, which we started flagging last summer, to a more long-run equilibrium focused on normalizing spare capacity and market share, supporting internal cohesion, and strategically disciplining US shale supply, is continuing,” Goldman Sachs analysts wrote in a note carried by Reuters. Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman cited “current healthy oil market fundamentals and steady global economic outlook”, as well as “low oil inventories”, for their decision to boost August production by more than previously expected. The decision reflects short-term bullish fundamentals for this summer. The superhike also reaffirms OPEC’s major pivot from defending oil prices to boosting output and market share for producers such as Saudi Arabia that have stuck to their quotas, and punishing producers that have overproduced and now have to forego most of their share of the production hike. Of these overproducers, Iraq and Russia appear to be trying to fall in line, but Kazakhstan continues to defy OPEC+ and pumps hundreds of thousands of barrels per day above its output ceiling, citing its inability to force foreign oil majors to cut production from new projects. The actual production increase from OPEC+ will be lower than the headline figure suggests, due to compensations for previous overproduction. Nevertheless, the superhike in August – and possibly in September – would accelerate the market glut after peak summer demand starts to wane in the autumn and winter, analysts say.
Oil Prices Expected to Stay Under $70
Despite heightened tensions in the Middle East, oil prices are likely to remain capped below $70 per barrel for the rest of the year amid ample supply and uncertainties about demand. Unless actual supply disruptions occur in and around the hotspots in the Middle East, the price of oil will be a function of supply and demand, analysts and investment banks say. Growing supply from the OPEC+ group, although not as high as the monthly headline figure of 411,000 barrels per day (bpd) suggests, is set to create an oversupply on the market going into autumn, even if summer demand holds strong. On the demand side, peak summer travel season may justify higher supply, but lingering trade and economic uncertainties may cap upside to prices. As a result, most analysts expect oil prices to hover around the current levels in the mid-$60s per barrel and average below $70 a barrel for 2025. Currently, oil’s ‘normal’ price would be in the $70s range, but the market oversupply is keeping prices in the $60s, Rob Thummel, senior portfolio manager of Tortoise Capital, told BNN Bloomberg this week. “In order for oil prices to return to what we think is the $70s, kind of normal price, you need the market to really rebalance,” Thummel said. “What that means is either oil production in other locations is going to fall, and, or effectively, demand for oil is probably going to rise more than what people expect in the second half of the year.” According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, crude oil may face headwinds in the second half of the year amid rising output and economic growth concerns. “OPEC8+ continues to ramp up production in an effort to punish overproducing quota cheaters, and to reclaim market share from higher-cost producers which may eventually have to dial down production amid lower price expectations,” Hansen said in a weekly commodities commentary. Major investment banks, including Goldman Sachs, Morgan Stanley, and JPMorgan, expect Brent crude prices to average $66.32 a barrel and WTI Crude to average $63.03 per barrel this year, according to a June survey by The Wall Street Journal. The responses in June were slightly higher compared to those in the May poll, but the analysts continue to see fundamentals as key for prices, and right now these fundamentals point to an oversupply amid uncertain economic prospects with the U.S. tariff policies. The Reuters survey of 40 analysts and economists in June also saw a slight increase in the price forecasts. Brent is seen averaging $67.86 per barrel in 2025, up from $66.98 a barrel expected in May. WTI is expected to average $64.51, up from $63.35 per barrel in May. However, analysts concur that the glut would cap rallies unless the Middle East conflict broadens and leads to more volatility and price spikes. In case an oversupply overwhelms the market if summer demand disappoints, OPEC+ is likely to act swiftly to put a floor under prices by pausing production increases. “We expect OPEC+ to exert caution in raising production, even putting plans on hold indefinitely at the first signs that prices may fall significantly,” Matthew Sherwood, lead commodities analyst at EIU, told Reuters. Next week could remove some uncertainty over the global economy and oil demand as July 9 is the end of President Trump’s 90-day pause on the so-called “reciprocal” tariffs. “We could see tariff increases reinstated on some US trading partners if trade deals are not concluded. This leaves a fair amount of uncertainty going into next week,” ING strategists Warren Patterson and Ewa Manthey wrote in a note on Thursday. The oil market is full of uncertainties, but current supply and demand balances point to an oversupply and subdued oil prices in the coming months, barring a supply disruption in the Middle East.
OPEC+ Speeds Up Oil Output Hikes, Adds 548,000 Bpd In August
OPEC+ agreed on Saturday to raise production by 548,000 barrels per day in August, further accelerating output increases at its first meeting since oil prices jumped – and then retreated – following Israeli and US attacks on Iran. The group, which pumps about half of the world’s oil, has been curtailing production since 2022 to support the market. But it has reversed course this year to regain market share and as US President Donald Trump demanded the group pump more to help keep gasoline prices lower. The production boost will come from eight members of the group – Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria. The eight started to unwind their most recent layer of cuts of 2.2 million bpd in April. The August increase represents a jump from monthly increases of 411,000 bpd OPEC+ had approved for May, June and July, and 138,000 bpd in April. OPEC+ cited a steady global economic outlook and healthy market fundamentals, including low oil inventories, as reasons for releasing more oil. The acceleration came after some OPEC+ members, such as Kazakhstan and Iraq, produced above their targets, angering other members that were sticking to cuts, sources have said. Kazakh output returned to growth last month and matched an all-time high. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, wants to expand market share amid growing supplies from rival producers like the United States, sources have said. With the August increase, OPEC+ will have released 1.918 million bpd since April, which leaves just 280,000 bpd to be released from the 2.2 million bpd cut. On top of that, OPEC+ allowed the UAE to increase output by 300,000 bpd.
India Plans to Deploy Over 1,000 Hydrogen Buses and Trucks by 2030
India is set to make a transformative leap in sustainable mobility, with plans to deploy over 1,000 hydrogen-powered buses and trucks by 2030. This ambitious initiative, part of the government’s National Green Hydrogen Mission, is designed to decarbonize the country’s long-haul transport sector, reduce reliance on fossil fuels, and position India as a global leader in hydrogen technology. The government has identified hydrogen as a practical and scalable solution for medium and heavy commercial vehicles, especially for long-distance freight and passenger transport. While battery electric vehicles are increasingly used for last-mile delivery, they face limitations in range and payload for long-haul operations. Hydrogen-powered vehicles, with their high energy density and faster refueling times, offer a compelling alternative to diesel trucks and buses, preserving cargo space and maximizing operational efficiency.