The prominent OPEC+ oil producers' alliance is awaiting concrete central bank action on interest rates before factoring in the potential impact on the energy demand landscape, according to Saudi Arabia's energy minister.
"Central banks, with all respect, they're flip-flopping ," Prince Abdulaziz bin Salman said during a Sunday press briefing, in response to a question on whether OPEC+ supply cuts could reinject inflationary pressures worldwide, at a time when central banks are reining in consumer price increases and shyly inching toward possibly cutting interest rates.
The production strategy decisions come at a time when OPEC's own forecasts show a 2.25 million barrel-per-day increase in demand, according to the Monthly Oil Market Report of May. The imminent summer driving season and the end of refinery maintenance in China are also set to exacerbate the call on crude in the short term.
Policy easing was also anticipated in the short term from the U.S. Federal Reserve, but a recent spate of stronger-than-expected economic data and indications from policymakers