# Oil pares gains on reports OPEC+ has a plan to gradually lift production

Reuters said two sources had earlier told the news agency that OPEC+ was considering raising production by 350,000 barrels per day in May, 350,000 barrels per day in June and 400,000 barrels per day in July.

West Texas Intermediate crude for May delivery
CL.1,
+1.00%

CLK21,
+1.00%
was up 45 cents, or 0.8%, to $59.61 a barrel on the New York Mercantile Exchange after trading as high as $60.84. June Brent crude
BRN00,
+0.69%

BRNM21,
+0.69%,
the global benchmark, was up 30 cents, or 0.5%, at $63.04 a barrel on ICE Futures Europe, after earlier topping $64.

Both crude benchmarks ended Wednesday with a monthly loss of close to 4%.

As OPEC+ went into this meeting, “the physical oil market is well supplied,” said Ann-Louise Hittle, vice president Macro Oils, at Wood Mackenzie, ahead of the latest news on the meeting. “However, that will shift over this quarter when we expect total demand to outpace supply.”

“A decision to keep OPEC+ output mostly unchanged for May from April would accelerate the rebalancing and risks overshooting, leaving the market at risk of price volatility,” she said in emailed commentary. “A sharp rise in prices from current levels in the low $60s per barrel would increase the risk of dampening both the global economic recovery and the revival in demand now under way.”

In opening remarks at the OPEC+ meeting Thursday, Saudi energy minister Prince Abdulaziz bin Salman said that “the reality remains that the global picture is far from even, and the recovery is far from complete.”

“On the supply side, we have continued to play our part,” he said. “Compliance with the levels we agreed has — once again — been impressive,” with new aggregate levels set at 113%. But “we have to approach the coming weeks with the same admirable commitment.”

“Until evidence of the recovery is undeniable, we should maintain this cautious stance,” Prince Abdulaziz said.

In a note Thursday, Fawad Razaqzada, analyst at ThinkMarkets, had referred to the potential for a production increase as merely an “outside chance” — one that “would come as a surprise to the market and would likely trigger selling even if the increase is small.”

U.S. Energy Secretary Jennifer Granholm late Wednesday tweeted that she had talked with Saudi Energy Minister Prince Abdulaziz bin Salman al-Saud and had “reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers.”

Petroleum-product futures tracked moves in oil prices Thursday. May gasoline
RBK21,
+1.10%
tacked on 0.8% to $1.98 a gallon and May heating oil
HOK21,
+1.22%
added 0.9% to $1.79 a gallon.

May natural gas
NGK21,
+1.34%
rose 1.3% to $2.64 per million British thermal units.

The U.S. Energy Information Administration reported Thursday that domestic supplies of natural gas rose by 14 billion cubic feet for the week ended March 26. That compares with an average increase of 19 billion cubic feet forecast by analysts polled by S&P Global Platts. The data also included upward revisions to the previous week’s stocks in the South Central region.