Oil prices fell by more than $2 per barrel at the start of Asian trading on Monday, as the OPEC+ alliance moved toward accelerating its pace of production increases.
اضافة اعلان
Brent crude futures dropped by $2.04, or 3.33%, to $59.25 per barrel by 22:40 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell by $2.10, or 3.60%, to $56.19 per barrel.
Both benchmarks touched their lowest levels since April 9 at the market’s open on Monday, after OPEC+ agreed to increase oil production for the second consecutive month. Output in June will rise by 411,000 barrels per day (bpd).
This June increase brings the total additions for April, May, and June to 960,000 bpd, marking a 44% reduction from the original 2.2 million bpd cuts agreed upon in 2022, according to Reuters calculations.
Tim Evans, founder of Evans on Energy, stated in a note:
“The May 3 decision by OPEC+ to raise production quotas by 411,000 bpd for June strengthens market expectations that the global supply-demand balance will shift to a surplus.”
OPEC+ sources told Reuters the group may fully phase out voluntary cuts by the end of October if member states fail to comply with their production quotas.
The sources also said Saudi Arabia is pushing OPEC+ to accelerate the rollback of previous production cuts as a form of punishment for Iraq and Kazakhstan, who have failed to adhere to their quotas.
Barclays cut its Brent crude price forecast by $4 to $66 per barrel for 2025, and by $2 to $60 per barrel for 2026, citing OPEC+'s move to accelerate the phasing out of production cuts, according to analyst Amarpreet Singh.
Meanwhile, tensions in the Middle East have escalated, after Israeli Prime Minister Benjamin Netanyahu vowed to respond to Iran following a missile launched by the Iran-backed Yemeni Houthi group that landed near Israel’s main airport.
Iranian Defense Minister Aziz Nasirzadeh said Sunday that Tehran would respond forcefully if attacked by the United States or Israel.
— (Reuters)
