Oil Falls as OPEC+ Considers Another Big Supply Increase
Oil headed for its first weekly decline in three, as OPEC+ considered another big output increase that could add to a market already facing a glut.
Brent fell near $64 a barrel, down for a fourth session and bringing its weekly loss to about 2%. West Texas Intermediate was below $61. OPEC and its allies were discussing another big output quota increase of 411,000 barrels per day for July, though no deal has been reached, delegates said.
Crude has fallen about 14% this year, hitting its lowest level since 2021 last month, as OPEC+ eased supply curbs at a faster-than-expected pace, just as the U.S.-led trade war is hurting demand. Data this week showed another rise in U.S. commercial oil stockpiles, adding to concerns about a surplus.
“The focus is increasingly turning to OPEC+ and what the group decides to do with July production levels,” said Warren Patterson, head of commodity strategy for ING Groep NV. “Another big increase for July would reinforce the policy shift from defending prices to defending market share.” A group of eight major OPEC+ nations, including the group’s de facto leader Saudi Arabia, will hold a virtual meeting on June 1 to decide on July output levels.
A Bloomberg survey of traders and analysts showed most expect a jump in output quotas. Elsewhere, the European Commission’s chief economist Valdis Dombrovskis said it would be appropriate to lower the price cap for Russian oil to $50 a barrel.
The current $60 price cap — a move meant to punish Moscow for its war on Ukraine while keeping oil flowing — is not hurting producers given the lower prices for now, he added. Brent for July delivery fell 0.6% to $64.06 a barrel as of 12:07 p.m. in Singapore. WTI for July delivery fell 0.6% to $60.83 a barrel.
Source: Bloomberg
