OPEC Monthly Report: Maintains unchanged forecast for oil demand growth this year, cautiously starts production increase in April.

OPEC maintains its forecast for global oil demand growth in 2025 and 2026 unchanged - maintaining the global crude oil demand growth rate at 1.3 million barrels per day in 2025 (about 60% higher than Morgan Stanley's expectations) and maintaining the global crude oil demand growth rate at 1.28 million barrels per day in 2026. Before planning to increase production significantly by 411,000 barrels per day in May and June, OPEC cautiously expanded production in April, with the agreed increase in supply by member countries being offset by compensatory production cuts by other member countries. In terms of the much-anticipated production increase, the OPEC monthly report showed that in April this year, OPEC+ member countries cautiously began the long-awaited oil production increase, with the organization planning to ramp up production in the coming months. The monthly report from OPEC showed that the eight countries that agreed to increase supply last month only increased production by a total of 25,000 barrels per day, far below the planned 138,000 barrels per day. April marked the beginning of the long-delayed process of restarting production by the alliance since 2022. While Saudi Arabia, the leader of OPEC, roughly increased the agreed upon production, other countries such as Kazakhstan and Iraq, who had previously promised to limit production to compensate for overproduction, saw their production drop. Compliance with quotas has always been a top priority for Saudi Arabia, and their disappointment with cheating by member countries apparently led the organization to recently decide to accelerate supply growth in May and June, tripling the originally planned amount. Saudi Arabia even warned that production would further soar in the coming months. OPEC's increased production comes as Trump's tariffs have led to a sharp drop in oil prices. Brent crude oil futures dropped below $60 a barrel last month to a four-year low, but with easing trade tensions, trading prices have rebounded to around $66 on Wednesday. According to data from the OPEC Secretariat, Saudi Arabia's efforts to push for compensatory production cuts are showing some initial signs of success. In April, Iraq's average daily production was 3.964 million barrels, partly fulfilling the promised compensatory production cuts for violating quotas. Even the largest violator, Kazakhstan, saw its daily production decrease by 41,000 barrels to 1.823 million barrels, still about 400,000 barrels higher than its quota. International partners such as Chevron Corporation (CVX.US) and Eni S.p.A. Sponsored ADR Group (E.US) said the government did not even ask them to cut supply, angering Saudi Arabia. In May and June, OPEC and its partners will increase production by 411,000 barrels per day each month. OPEC member country ministers will decide on July production levels at a video conference on June 1. Goldman Sachs Group, Inc. expects that they will agree to a third and final increase of about 411,000 barrels per day. OPEC also pointed out that after the oil price drop, oil supply growth from competitors in 2025 will slow down. OPEC revised down its forecast for oil supply growth from other oil-producing countries outside the US and OPEC+ for this year, stating that capital expenditures are expected to decrease after the oil price drop. OPEC stated that in 2025, supply from countries outside OPEC+ will increase by about 800,000 barrels per day, lower than the previous month's forecast of 900,000 barrels per day. Slowing supply growth from outside OPEC+ will make it easier to balance the market. In recent years, rapid growth in US shale oil and other countries has put pressure on oil prices. OPEC stated in the report that exploration and production investments in regions outside OPEC+ are expected to decrease by about 5% compared to the previous year in 2025.