Global oil prices fell sharply on Thursday, with Brent crude dropping 1.7% to $63.83 per barrel and US West Texas Intermediate (WTI) crude sliding to $60.55, as OPEC+ discussions over a potential July production increase intensified concerns about oversupply, according to Reuters.
Bloomberg reported that OPEC+ delegates are weighing a 411,000 barrels per day (bpd) production hike for July, tripling earlier plans, with Saudi Arabia expected to lead the increase. This follows the group’s decision to unwind cuts by 2.2 million bpd by November, accelerating a supply surge that began in May.
Harry Tchiliguirian of Onyx Capital Group likened the move to “taking off a Band-Aid in one fell swoop,” signalling OPEC+’s abrupt pivot from price defence to reclaiming market dominance. RBC Capital’s Helima Croft noted the 411,000-bpd hike is the “most likely outcome,” though she questioned whether voluntary cuts would align with seasonal demand trends.
The decision, set for finalisation at OPEC+’s 1 June meeting, coincides with internal pressures to discipline quota-violating members like Iraq and Kazakhstan, and external challenges from US shale producers.
Prices faced additional downward momentum from a surprise 1.3 million-barrel rise in US crude inventories last week, defying expectations of a 1.3 million-barrel drawdown. The build, driven by a six-week high in imports and weaker gasoline demand, underscores faltering consumption in the world’s largest economy.
Emril Jamil of LSEG warned the surplus could “exert downward pressure on WTI,” potentially spurring higher U.S. exports to Europe and Asia.
The move also responds to geopolitical pressures, including US tariffs and China’s retaliatory measures, which have dampened global growth forecasts. The International Energy Agency recently trimmed its 2025 oil demand outlook by 0.5 million bpd, citing economic headwinds.
