Oil prices fall amid talks of OPEC+ production increase in July

Oil prices declined on Thursday as investors reacted to reports that OPEC+ is considering increasing production in July, raising concerns that global supply may surpass demand growth.

Brent crude futures dropped 66 cents, or 1.02%, to $64.25 a barrel by midday, while U.S. West Texas Intermediate fell 51 cents, or 0.83%, to $61.06.

OPEC+ members are reportedly discussing a potential output increase of around 411,000 barrels per day for July, though no final decision has been made. This possible increase follows ongoing efforts by the group to unwind previous production cuts, with additional supply planned for May and June.

Kazakhstan's oil production has risen by 2% in May, contributing to supply growth.

Recent data from the U.S. Energy Information Administration showed a surprise build in crude inventories, rising by 1.3 million barrels to 443.2 million barrels in the week ending May 16. Gasoline and distillate demand also weakened, while crude imports hit a six-week high.

These factors have added further pressure on prices, particularly WTI, and may encourage increased U.S. exports to Europe and Asia.

In a related development, the U.S. Secretary of State announced that Chevron’s license to operate in Venezuela will expire on May 27, a move that could impact market dynamics. However, previous extensions of similar deadlines have led to some market skepticism.