Oil Jumps After OPEC+ Agrees To Boost Output By 648K Barrels

After just 11 minutes, a new record for brevity, the OPEC+ minister meeting ended and as noted earlier, concluded by agreeing to a 648K increase for both July and August, the first time that OPEC+ has deviated from its standard monthly increase of 432K since the increments were started last summer. The decision will accelerate the completion of OPEC's reversal of several years of output cuts a month earlier than planned.

In the grand scheme of things, the 200K or so increase in output does nothing. Furthermore, as Bloomberg notes, any bigger increase will be shared pro-rata by all participants which is "going to eat into the volume actually delivered by quite a bit."

The decision means that Saudi Arabia has finally agreed to Biden's constant pleading for extra barrels, as the president seeks help with runaway crude prices -- and to fill the impending supply gap, not to mention the rapidly depleting US strategist petroleum reserve.

According to Bloomberg, the deal would mean Saudi production goes higher earlier than scheduled - with output at 10.957 million barrels a day in August. If demand is continuing to bounce back and sanctions are taking a further toll on Russian exports, will we see the kingdom above 11 million before the summer is over? And how long before Saudis Arabia can't pump any more at a time of peak demand, and a US SPR draining at 1mmb/d.