Oil prices are heading for their first weekly drop in three weeks. This comes as OPEC+ is considering a big increase in oil production, which could add more supply to a market already expected to have a surplus.
Brent crude oil fell toward $64 a barrel, marking its fourth straight day of decline and a weekly loss of about 2%. West Texas Intermediate (WTI) slipped below $61 a barrel. OPEC+ members are discussing raising production by 411,000 barrels per day in July, although no final decision has been made yet.
Oil prices have dropped about 14% this year. Last month, prices hit their lowest level since 2021. This decline follows OPEC+ easing supply limits faster than expected, while demand faces challenges from the ongoing US-led trade war.
Recent data also showed US commercial oil inventories rising again, raising concerns about oversupply.
Warren Patterson, head of commodities strategy at ING Groep NV, said the market is focusing on OPEC+’s July output decision. He noted that a large production increase would signal a shift in policy—from supporting prices to protecting market share.
Eight key OPEC+ countries, including Saudi Arabia, will meet virtually on June 1 to decide July’s production levels. Most traders and analysts expect the group to approve the output hike.
In other developments, the European Commission’s economy chief, Valdis Dombrovskis, suggested lowering the price cap on Russian oil to $50 a barrel.
The current $60 cap, intended to punish Russia for its war in Ukraine while keeping oil flowing, is not currently hurting Moscow due to low global prices.
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