Oil prices fell sharply in Asian trading on Monday after OPEC+ agreed to a bigger-than-expected production increase next month, sparking oversupply worries.
Markets remained focused on U.S. trade negotiations, as President Donald Trump appeared to extend the tariff deadline from July 9 to August 1.
As of 21:06 ET (01:06 GMT), Brent Oil Futures expiring in September dropped 1.1% to $67.50 per barrel, while West Texas Intermediate (WTI) crude futures slumped 2.1% to $65.59 per barrel.
Both contracts jumped between 1% and 2% last week, after nursing double-digit losses in the final week of June.
OPEC+ output boost exceeds forecasts The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, announced on Saturday that it will increase oil output by 548,000 barrels per day (bpd) in August.
The move exceeded market expectations and pressured prices sharply lower.
The hike is larger than the 411,000 bpd increases already implemented for May, June, and July -- each of which was already three times faster than the group’s original tapering schedule.
The group also warned that it will consider another 548,000 b/d hike in September at the next meeting on August 3.
The decision marks a continued rollback of the voluntary 2.2 million bpd in cuts that major producers like Saudi Arabia and Russia had initiated earlier this year to support prices.
“While there was little doubt that OPEC+ had shifted its policy from defending prices to defending market share, this latest boost solidifies this pivot,” ING analysts said in a note.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. “Larger supply hikes increase the scale of the surplus in the oil market later in the year. This supports the view that there’s further downside for oil prices,” they added.
Trump tariff deadline shifts to Aug 1 OPEC’s decision comes amid ongoing concerns about sluggish economic growth in key markets like China and uncertainty around U.S. trade policy, including tariffs.
U.S. President Donald Trump said on Sunday that the U.S. was nearing multiple trade agreements and will begin notifying partners of impending tariff increases by July 9, with the new rates set to take effect on August 1.
The revised timeline delays the implementation of tariffs by three weeks, creating uncertainty over Trump’s tariff stance.
U.S. tariff worries further clouded the global demand outlook, as traders fear trade barriers could slow economic activity and reduce energy consumption.
