Oil prices fell by more than $2 per barrel during Asian trading on Monday amid expectations that OPEC+ will accelerate its planned increase in oil production.
The move has heightened concerns about an oversupplied market already grappling with an uncertain demand outlook.
Brent crude futures dropped by $2.21, or 3.61%, to $59.08 a barrel as of 06:53 GMT, while U.S. West Texas Intermediate (WTI) crude fell by $2.29, or 3.93%, to $56.00 a barrel.
Both benchmarks hit their lowest levels since 9 April at the opening of Monday’s trading session, following OPEC+’s decision to boost output for a second consecutive month, raising production in June by 411,000 barrels per day (bpd).
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This increase brings the total rise in output for April, May and June to 960,000 bpd—approximately 44% of the 2.2 million bpd in voluntary cuts agreed upon since 2022.
Sources indicate that the alliance could fully unwind its voluntary cuts by the end of October if compliance with production quotas does not improve among member states.
OPEC+ insiders have revealed that Saudi Arabia is advocating for a faster rollback of previous output cuts in response to Iraq and Kazakhstan’s continued failure to meet agreed production levels.
Meanwhile, the six-month Brent futures spread shifted into contango for the first time since December 2023, standing at 11 cents per barrel. This pricing structure where shorter-term contracts are cheaper than those with later delivery, indicates that supply is currently exceeding demand.
