Oil tumbles as OPEC+ accelerates output hikes, surplus looms
Oil prices fell more than $2 a barrel in Asian trade on Monday as OPEC+ is set to further speed up oil output hikes, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook.
Brent crude futures dropped $2.21, or 3.61%, to $59.08 a barrel by 0653 GMT while U.S. West Texas Intermediate crude was at $56.00 a barrel, down $2.29, or 3.93%.
Both contracts touched their lowest since April 9 at Monday's open after OPEC+ agreed to accelerate oil production hikes for a second consecutive month, raising output in June by 411,000 barrels per day (bpd).
The June increase from the eight will take the total combined hikes for April, May and June to 960,000 bpd, representing a 44% unwinding of the 2.2 million bpd of various cuts agreed on since 2022, according to Reuters calculations.
The group could fully unwind its voluntary cuts by the end of October if members do not improve compliance with their production quotas, OPEC+ sources told Reuters.
OPEC+ sources have said Saudi Arabia is pushing OPEC+ to accelerate the unwinding of earlier output cuts to punish fellow members Iraq and Kazakhstan for poor compliance with their production quotas.
The 6-month Brent price spread flipped to a contango of 11 cents a barrel for the first time since December 2023, with oil cheaper now than in future months, reflecting expectations that the market is amply supplied.
Source : Reuters
