Oil prices declined more than 1 percent on Monday as OPEC+ moved to accelerate output increases, raising concerns about a growing supply glut amid an uncertain demand outlook.
Brent crude futures fell 70 cents, or 1.14 percent, to $60.59 a barrel by 1131 GMT. U.S. West Texas Intermediate crude dropped 75 cents, or 1.29 percent, to $57.54.
Prices recovered slightly after hitting their lowest levels since April 9 in early trading. The market reacted to OPEC+’s weekend decision to raise oil production in June by 411,000 barrels per day, marking the second consecutive month of accelerated output hikes. With this adjustment, total increases for April, May, and June will reach 960,000 barrels per day.
That figure represents 44 percent of the 2.2 million barrels per day in voluntary cuts the group has implemented since 2022.
The group may fully unwind those voluntary cuts by October if compliance with production quotas does not improve. Saudi Arabia is reportedly urging the group to speed up the rollback of cuts, partly to address non-compliance from countries like Iraq and Kazakhstan.
The return of additional barrels to the market comes at a time of economic uncertainty, which has already pressured the oil futures curve. The premium between front-month Brent contracts and those six months ahead narrowed to 22 cents per barrel, down from 47 cents in the previous session.
The spread briefly shifted into a discount earlier in the day, a structure known as contango, which can signal market weakness.
In response to the policy shift, banks have revised their oil price forecasts. Some now expect Brent to average $66 a barrel in 2025 and $60 in 2026, while others see the benchmark averaging $65 this year, down from earlier expectations of $70.
Broader market sentiment remains cautious amid ongoing recession fears and soft demand for refined fuels. Observers have noted a significant build-up in global crude inventories since mid-February, with an estimated 150 million additional barrels stored in onshore tanks and on tankers at sea.
