Oil prices fall on the prospect of more OPEC+ supplies, easing Mideast risks
The oil price fell 1% Monday, as the outlook for supply was boosted by a lowering of geopolitical risk in the Middle East.
Brent crude futures dropped 66 cents or 0.97% to $67.11 per barrel at 0031 GMT ahead of the expiration of the August contract later that day. The September contract, which is more active, was down 83 cents at $65.97.
U.S. West Texas Intermediate Crude dropped 94 cents or 1.43% to $64.58 per barrel.
Both benchmarks experienced their largest weekly drop since March 2023 last week. However, they are expected to end higher in June, with a second monthly gain of over 5%.
Brent oil prices soared to over $80 per barrel on June 13, after which the U.S. bombed Iran’s nuclear installations. They then fell to $67 a barrel after President Donald Trump declared an Iran-Israel truce.
Tony Sycamore, IG's markets analyst, said that the market has removed most of the premium for geopolitical risks built into the price after the Iran-Israel ceasefire.
Four delegates of OPEC+ (which includes allies of the Organization of the Petroleum Exporting Countries) said that the group is set to increase production by 411,000 barils per day in August following similar increases for May June and July.
OPEC+ will meet on the 6th of July and this would mark the fifth consecutive monthly increase since April, when the group began unwinding its production cuts.
Baker Hughes reported that the number of oil rigs operating in the U.S. fell six to 432, its lowest level since October 20, 2021. (Reporting and editing by Florence Tan)
(source: Reuters)
