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Business Standard
5 days ago
- Business
- Business Standard
Oil dips to one-week low as Opec+ output boost stokes oversupply fears
Oil prices fell to their lowest levels in a week on Monday after Opec+ agreed to another large output increase in September, adding to oversupply concerns after US data showed lacklustre fuel demand in the top consuming nation. Brent crude futures fell 91 cents, or 1.3 per cent, to settle at $68.76 a barrel, while US West Texas Intermediate crude declined by $1.04, or 1.5 per cent, to close at $66.29 a barrel. Both contracts settled at their lowest in a week, after declining close to 3 per cent on Friday. The Organization of the Petroleum Exporting Countries and its allies, together known as Opec+, agreed on Sunday to raise oil production by 547,000 barrels per day (bpd) for September. The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marks a full and early reversal of the group's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4 per cent of global demand. While the group cited healthy market fundamentals to back its decision, data released by the US government last week showed the weakest gasoline demand in May, the start of the country's summer driving season, since the COVID-19 pandemic of 2020. The data also showed US oil production at a monthly record high in May, adding to global oversupply concerns. Oil traders are now hedging for the possibility of further supply increases from Opec+, with potential discussions to unwind a further 1.65 million bpd of cuts at the group's next meeting on September 7 adding pressure to oil prices. "Opec+ retains a substantial amount of spare production capacity, and markets are now watching closely to see whether the group will tap into it," StoneX analyst Alex Hodes said. "So far, there are no clear signals that Opec+ intends to deploy this additional capacity, but the possibility remains on the table," he added. Analysts at Goldman Sachs expect the actual increase in supply from the eight Opec+ countries that have raised output since March will be 1.7 million bpd because other members have cut output after overproducing. Investors also continued to digest the impact of the latest US tariffs on exports from dozens of trading partners, and remain wary of further US sanctions on Russia. US President Donald Trump has threatened to impose 100 per cent secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine. Trump on Monday said he will substantially raise tariffs on India over its purchases of Russian oil, after two Indian government sources told Reuters over the weekend that the country will keep buying oil from Moscow despite Trump's threats. That development helped limit oil's losses. About 1.7 million bpd of crude supply will be at risk if Indian refiners stop buying Russian oil, ING analysts said in a note. "All eyes in the market will now shift to US President Trump's decision on Russia this Friday and whether he targets buyers of Russian oil with secondary sanctions/tariffs or not," UBS analyst Giovanni Staunovo said. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Recorder
5 days ago
- Business
- Business Recorder
Oil falls as OPEC+ output hike adds to oversupply concerns
NEW YORK/LONDON: Oil prices fell to their lowest in a week on Monday after OPEC+ agreed to another large output increase in September, adding to oversupply concerns after US data showed lacklustre fuel demand in the top consuming nation. Brent crude futures fell 43 cents, or 0.6%, to $69.24 a barrel by 11:39 a.m. ET (1539 GMT), while US West Texas Intermediate crude declined by 48 cents, or 0.7%, to $66.85 a barrel. Both contracts were down more than 2% earlier in the session and hit the lowest in a week, after declining close to 3% on Friday. The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day (bpd) for September. The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marks a full and early reversal of the group's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of global demand. While the group cited healthy market fundamentals to back its decision, data released by the US government last week showed the weakest gasoline demand in May, the start of the country's summer driving season, since the COVID-19 pandemic of 2020. The data also showed US oil production at a monthly record in May, adding to global oversupply concerns. Oil traders are now hedging for the possibility of further supply increases from OPEC+, with potential discussions to unwind a further 1.65 million bpd of cuts at the group's next meeting on September 7 adding pressure to oil prices. 'OPEC+ retains a substantial amount of spare production capacity, and markets are now watching closely to see whether the group will tap into it,' StoneX analyst Alex Hodes said. 'So far, there are no clear signals that OPEC+ intends to deploy this additional capacity, but the possibility remains on the table,' he added.
Business Times
5 days ago
- Business
- Business Times
Oil falls as Opec+ output hike adds to oversupply concerns
[NEW YORK] Oil prices fell to their lowest levels in a week on Monday after Opec+ agreed to another large output increase in September, adding to oversupply concerns after US data showed lacklustre fuel demand in the top consuming nation. Brent crude futures fell 91 cents, or 1.3 per cent, to settle at US$68.76 a barrel, while US West Texas Intermediate crude declined by US$1.04, or 1.5 per cent, to close at US$66.29 a barrel. Both contracts settled at their lowest in a week, after declining close to 3 per cent on Friday. The Organization of the Petroleum Exporting Countries and its allies, together known as Opec+, agreed on Sunday to raise oil production by 547,000 barrels per day (bpd) for September. The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marks a full and early reversal of the group's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4 per cent of global demand. While the group cited healthy market fundamentals to back its decision, data released by the US government last week showed the weakest petrol demand in May, the start of the country's summer driving season, since the Covid-19 pandemic of 2020. The data also showed US oil production at a monthly record high in May, adding to global oversupply concerns. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Oil traders are now hedging for the possibility of further supply increases from Opec+, with potential discussions to unwind a further 1.65 million bpd of cuts at the group's next meeting on Sept 7 adding pressure to oil prices. 'Opec+ retains a substantial amount of spare production capacity, and markets are now watching closely to see whether the group will tap into it,' StoneX analyst Alex Hodes said. 'So far, there are no clear signals that Opec+ intends to deploy this additional capacity, but the possibility remains on the table,' he added. Analysts at Goldman Sachs expect the actual increase in supply from the eight Opec+ countries that have raised output since March will be 1.7 million bpd because other members have cut output after overproducing. Investors also continued to digest the impact of the latest US tariffs on exports from dozens of trading partners, and remain wary of further US sanctions on Russia. US President Donald Trump has threatened to impose 100 per cent secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine. Trump on Monday said he will substantially raise tariffs on India over its purchases of Russian oil, after two Indian government sources told Reuters over the weekend that the country will keep buying oil from Moscow despite Trump's threats. That development helped limit oil's losses. About 1.7 million bpd of crude supply will be at risk if Indian refiners stop buying Russian oil, ING analysts said in a note. 'All eyes in the market will now shift to US President Trump's decision on Russia this Friday and whether he targets buyers of Russian oil with secondary sanctions/tariffs or not,' UBS analyst Giovanni Staunovo said. REUTERS
Gulf Business
02-07-2025
- Business
- Gulf Business
Oil prices rise on strong demand signals ahead of OPEC+ decision
Oil prices edged higher on Tuesday as investors took stock of positive demand indicators, while also treading cautiously ahead of an OPEC+ meeting to decide the gro up 's August output policy. Brent crude LCOc1 settled up 37 cents, or 0.6 per cent, at $67.11 a barrel, while US West Texas Intermediate crude CLc1 settled 34 cents higher, or up around 0.5 per cent, at $65.45 a barrel. The gains were likely due to s up portive data from a private-sector survey in China, which showed factory activity oil brokerage Liquidity Energy. Expectations that Saudi Arabia will raise its August crude oil prices for buyers in Asia to a oil were also s up porting the notion of robust demand , Rothenberg said. Oil 's gains were kept in check by expectations that the OPEC+ gro up will boost its August crude oil output by an amount similar to the outsized hikes agreed in May, June, and July. Four OPEC+ sources told Reuters last week the gro up plans to 'All eyes will be on OPEC+'s decision over the weekend, when the gro up is expected to add another 411,000 bpd of production in an effort to gain more market share, primarily over the US shale producers,' StoneX energy analyst Alex Hodes told clients. Besides gaining market share from US shale producers, which pumped oil at a up has also been trying to punish overproducing members. OPEC+ member Kazakhstan, one of the world's 10 largest oil producers, raised oil production last month to match an Saudi Arabia, the de facto leader of the OPEC+ gro up , raised its June crude oil exports to the fastest rate in a year, data from Kpler showed. 'These exports are flooding out even faster than the OPEC+ deal implies during the summer, when peak domestic demand typically keeps oil s up plies closer to home,' Hodes said. In the US, crude oil inventories rose by 680,000 barrels in the past week, according to sources citing figures from the American Petroleum Institute. Official data from the Energy Information Administration is due Wednesday at 10:30 a.m. ET. API/S Trump and tariffs Investors are also watching trade negotiations ahead of US President Donald Trump's tariff deadline of July 9. Trump on Tuesday said he is not thinking of extending the deadline. A trade deal with India was Bessent also warned countries could be notified of The European Union wants immediate
Business Recorder
30-06-2025
- Business
- Business Recorder
Oil prices slip on easing Middle East risks
HOUSTON: Oil prices slipped on Monday as investors weighed easing Middle East risk alongside a possible OPEC+ output increase in August and uncertainty over the global demand outlook. Brent crude futures edged down by 19 cents, or 0.3%, to $67.58 a barrel at 10:01 a.m. EDT (1501 GMT), ahead of the August contract's expiry later on Monday. The more active September contract was down 34 cents at $66.46. U.S. West Texas Intermediate crude was down 62 cents, or 1%, at $64.90 a barrel. The Brent and WTI benchmarks posted their biggest weekly declines since March 2023 last week but are set for a second consecutive monthly gain of 5.8% and 6.8% respectively. A 12-day war that started with Israel targeting Iran's nuclear facilities on June 13 sent prices above $80 a barrel before sliding back to $67. 'Supply increases and a bearish demand outlook by data reporting agencies will likely start to drive oil markets onceagain after tensions appear to have cooled between Iran and Israel,' StoneX analyst Alex Hodes said in a note on Monday. Four OPEC+ sources told Reuters last week that the group was set to boost production by 411,000 barrels per day (bpd) in August after similar increases for May, June and July. Oil steadies after report of planned OPEC+ Aug output hike 'I believe this potential supply pressure remains under-priced, leaving crude vulnerable to further weakness,' said Ole Hansen, head of commodity strategy at Saxo Bank. ' soon we will enter the demand shoulder season where OPEC+ increases will become much more visible, and harder to ignore.' The oil producer group is set to meet again on July 6. Some market tightness remains despite rising output, however, with lower than expected production increases while exports from OPEC+ countries have remained stable, said Giovanni Staunovo, analyst at UBS. A Reuters survey found that OPEC oil output rose in May, but gains were limited by cuts by countries that had previously exceeded their quotas. Saudi Arabia and the United Arab Emirates, meanwhile, made smaller increases than allowed. Kazakhstan, which has persistently exceeded quotas set by OPEC+, may exceed its previous oil production forecast by around 2% this year following an upgrade to output at its largest Caspian oilfields, Reuters calculations, based on data from state-owned energy company KazMunayGaz, showed. A survey of 40 economists and analysts in June forecast Brent crude will average $67.86 per barrel in 2025, up from May's $66.98 forecast, while U.S. crude is seen at $64.51, above last month's $63.35 estimate.
