Written by The Banking Post
Oil markets stumbled this week after OPEC+ announced a larger-than-anticipated production increase for August, prompting investor concerns over potential oversupply.
Key Price Movements
- Brent Crude: Down $0.80 (–1.2%) to $67.50 per barrel
- WTI Crude: Down $1.32 (–2.0%) to $65.68 per barrel
OPEC+ Action
- Production Hike: 548,000 barrels per day (bpd) for August, a notable jump from May–July increases of 411,000 bpd and April’s 138,000 bpd.
- The decision was backed by strong market fundamentals and low inventory levels.
Analysts say the move marks a shift toward greater competition for market share among OPEC+ members, with most of the supply boost so far driven by Saudi Arabia.
RBC Capital projects nearly 80% of previously pledged 2.2 million bpd output cuts from eight producers will return to market.
Market Signals
- In a bullish nod to demand recovery, Saudi Arabia raised the price of its Arab Light crude for Asian buyers to a four-month high.
- Goldman Sachs forecasts another 550,000 bpd increase in September, with confirmation expected at OPEC+’s next meeting on August 3.
Global Trade Context
Separately, US President Donald Trump announced impending hikes in tariff rates on several trade partners, with formal notifications due by July 9 and implementation set for August 1. The US is expected to finalize multiple trade agreements in the coming days.
The coordinated oil and trade shifts underscore intensifying global competition in energy and manufacturing markets.
