OPEC meets amid potential for higher output

OPEC holds its semi-annual meeting on June 2nd with all the evidence that the strategy to target market share is working. Oil prices have recovered strongly from multi-year lows and are now hovering close to USD 50/b while production and investment plans across the oil and gas industry are in decline. Despite the improvement in market conditions and the pressure on some of OPEC's more strained economies we do not expect the producer's bloc to announce a change in policy in the form of a production cut or freeze. Rather, we anticipate that flows from OPEC producers will continue to move higher despite the risks that may pose to the sustainability of the oil rally.

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