Oil prices fell for a fourth consecutive session on Friday, poised for their first weekly decline in three weeks, as markets braced for an anticipated increase in OPEC+ production.
Brent crude futures dropped 22 cents, or 0.3%, to $64.22 per barrel by 0919 GMT, while U.S. West Texas Intermediate (WTI) crude futures shed 21 cents, also 0.3%, to $60.99 per barrel.
The decline follows growing expectations that OPEC+, the alliance of the Organization of the Petroleum Exporting Countries and partners led by Russia, will boost output by an additional 411,000 barrels per day (bpd) in July.
The group, which meets next week, has already raised production targets by roughly 1 million bpd for April through June and is reportedly considering unwinding the remaining 2.2 million bpd of voluntary cuts by October’s end, according to Reuters.
Brent is down, driven by expectations that OPEC+ will lift its production quota by another 411,000 bpd in July, said Bjarne Schieldrop, an analyst at SEB. This supply increase has overshadowed earlier market concerns sparked by reports of potential Israeli strikes on Iranian nuclear facilities and new EU and UK sanctions targeting Russia’s oil trade.
Adding to the downward pressure, U.S. crude oil inventories have surged to levels reminiscent of the COVID-19 pandemic, signaling robust storage demand, according to data from storage broker The Tank Tiger. The U.S. stockpile has further weighed on prices as traders anticipate a supply glut in the coming months.
Market participants are also keeping a close eye on U.S.-Iran nuclear talks, with the fifth round scheduled for Friday in Rome. The outcome could influence the potential return of Iranian oil to global markets, a factor that could further impact supply dynamics.
Additionally, Friday’s U.S. oil and gas rig count data from Baker Hughes will provide insight into future production trends.
WHAT YOU SHOULD KNOW
As OPEC+ prepares to ramp up output, the oil market faces a delicate balancing act, with supply pressures tempering geopolitical concerns and shaping price expectations for the months ahead.
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