Planned production hikes by the Organization of the Petroleum Exporting Countries (OPEC) in April are expected to have a minimal impact on expectations of the crude oil market's balance, as some members could struggle to produce at higher levels and greater compliance on compensation cuts are expected, according to a Friday note from ANZ Research.
The plan reflects the members' pressure to lift output, as well as possible political considerations. US President Donald Trump has pushed for lower oil prices.
The impact of the OPEC supply increases could also be further reduced by supply outages with Iranian oil supply expected to fall by 750,000 barrels per day by the end of 2025, in the wake of pressure from the US.
ANZ Research also said that supply side issues reemerged in metals markets as unplanned disruptions are becoming more common and the sector battles rising costs as well as difficult operating conditions.
The firm lowered its short-term price target to $75 per barrel of oil, with upsides in the short term due to tariffs on Canadian crude and rising disruptions to supply from Iran and Venezuela.
However, looser balances in the second half of the year should see Brent crude push back towards $70 per barrel of oil by the end of the current year, per the report.
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