OPEC plans to stick with its strategy also after the recent oil price drop

Oil prices are still prone to weakness. Brent has fallen to $56 per barrel and as such is again nearing the three-month low it hit two weeks ago.

At $49 per barrel, WTI is at its lowest price since early April. There is little at the moment to suggest that prices will recover anytime soon. By expanding its production to a three-year high, OPEC is ensuring that the oil market remains amply supplied. 

Commerzbank says, "No change can be expected here in the near future".

OPEC delegates made it clear that they view the weak price as temporary and plan to stick with their strategy of defending market shares. OPEC is assuming that demand will pick up in the second half of the year. 

Demand is in fact already extremely robust, but is still not sufficient to reduce the oversupply. This at least is the impression given by the inventory data published yesterday by the US Department of Energy.