- Oil is trading higher at $111.14/Bbl and is up nearly 50% this year
- Although concerns about a global economic slowdown have weighed on futures, demand is still strong
- The risk of disruptions in Russian supply due to the conflict in Ukraine is another factor supporting crude and refined products
- French President Macron informed President Biden that the UAE is producing "at maximum" capacity and Saudi Arabia can add roughly 150 MBbl/d of crude production at the G7 conference (BBG)
- The remarks follow Macron's discussion of OPEC's crude production with UAE President Sheikh Mohammed bin Zayed, and after the UAE Energy Minister stated that the nation is close to its approved OPEC+ quota
- Macron also stressed that the UAE had issued a warning, stating that Saudi Arabia did not possess "huge capacities" that could be produced in less than six months
- This week's OPEC+ meeting is expected to be straightforward as the group moves toward the conclusion of a two-year agreement on oil supplies (BBG)
- The cartel is expected to continue its policy stance, a supply increase of 648 MBbl/d, due for August
- However, the OPEC+ countries' discussions will become more difficult in the coming weeks as they are expected to fill the supply gap caused by sanctions on fellow member Russia
- Beginning this week, the Biden administration will hold lease sales for new oil and gas drilling on public lands and, for the first time, it will put new regulations in place for producers
- The administration is anticipated to put up for sale portions of federally held land in seven Western states for drilling
- Additionally, the department stated that it will increase the fees that oil companies must pay to the government in exchange for the oil they extract, increasing royalty rates from 12.5% to 18.75% for new sales