Oil Drops After OPEC+ Supply Hike Amplifies Concerns Over Glut
Brent edged lower toward $69 a barrel, while West Texas Intermediate was near $67, after OPEC+ endorsed an additional 547,000 barrels-a-day of output from September.
Oil fell after OPEC+ agreed to another major output increase, stoking concerns about global oversupply just as the US-led trade war may be exacting a toll on economic growth and energy consumption.
Brent edged lower toward $69 a barrel, while West Texas Intermediate was near $67, after OPEC+ endorsed an additional 547,000 barrels-a-day of output from September, in line with expectations. It’s uncertain whether additional supply curbs will be relaxed in the coming months.
Crude is coming off the back of a three-month winning run, although prices slumped last Friday as soft US jobs data raised concern the world’s largest economy was slowing following the Trump administration’s wave of levies. Still, traders are weighing the possibility Washington may also move later this week against Russian oil flows, including buyers such as India, in a bid to raise the pressure on Moscow to pause the war in Ukraine.
“While OPEC+ policy remains flexible and the geopolitical outlook uncertain, we assume that OPEC+ keeps required production unchanged after September,” Goldman Sachs Group Inc. analysts including Yulia Zhestkova Grigsby said in a note. The bank retained forecasts for Brent to average $64 a barrel in the fourth quarter, followed by a drop to $56 in 2026.
The September output hike announced by OPEC+ at the weekend stands to complete the reversal of a cutback made by an eight-member sub-group in the alliance, including Saudi Arabia and Russia, in 2023. The progressive restoration of supplies over recent months has been widely seen as a concerted push by the cartel to reclaim market share.
With uncertainty hanging over Russian flows, India hasn’t given its refiners instructions to stop buying the nation’s shipments, according to people familiar with the matter. Still, President Donald Trump earlier blasted New Delhi for the energy purchases, and threatened so-called secondary sanctions that could take effect from Aug. 8. On Sunday, Trump told reporters special envoy Steve Witkoff may head to Russia this week, possibly Wednesday or Thursday.
“The initial reaction on the crude futures re-open was to sell,” said Chris Weston, head of research at Pepperstone Group in Melbourne. Where OPEC+ goes from here is attracting debate, with investors also focused on potential sanctions on Russia and its trading partners, inventory levels, as well as US economic activity, he said.
Prices:
Brent for October settlement declined as much as 1%, before trading 0.5% lower at $69.30 a barrel at 8:29 a.m. in Singapore.
WTI for September delivery shed 0.5% to $66.99 a barrel.
