Discipline and deviation

Opec action will keep oil prices at reasonable levels

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At an online meeting over the weekend, the Organization of Petroleum Exporting Countries (Opec) plus associates like Russia — known as Opec+ — agreed to step up the rate of oil production. In June, output will be increased by over 400,000 barrels a day, according to the grouping.

This is a second consecutive month that it has done this, and it takes the amount by which daily production will increase over the April-June quarter to almost a million barrels. Brent crude oil futures were already dipping to nearly $61 a barrel before this announcement, and prices might go below $60 once traders have had a chance to digest this news. The question that many policymakers will ask is whether this is a temporary shift, a partial unwinding of decisions over recent years to cut output, or whether the cartel has now shifted to targeting a different price range altogether.