Renewed supply pressure from another possible Opec+ output hike in July is weighing on the market
23 May 2025 - 07:54
bySiyi Liu
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Singapore — Oil prices dropped for a fourth consecutive session on Friday and were set for their first weekly decline in three weeks, weighed down by renewed supply pressure from another possible Opec+ output hike in July.
Brent futures fell 31c, or 0.5%, to $64.13 a barrel by 4.12am GMT. US West Texas Intermediate (WTI) crude futures lost 33c, or 0.5%, to $60.87.
For the week, Brent has fallen 1.9%, and WTI has dropped 2.5%, following two weeks of gains.
Both contracts touched their lowest in more than one week on Thursday after a Bloomberg News report that Opec+ was considering another large production increase at a meeting on June 1.
Increasing output by 411,000 barrels a day for July was among the options discussed, but no final agreement has yet been reached, the report said, citing delegates.
“The oil market is under renewed pressure as noise builds around what Opec+ will do with their July output levels,” ING analysts wrote in a research note.
They expect that Opec+ will go ahead with a 411,000 bpd supply increase for July and currently forecast Brent to average $59 a barrel in the fourth quarter.
Opec+, which includes the oil cartel Opec and allies such as Russia, agreed to increase production by nearly 1-million barrels a day in April, May and June.
The supply tailwind offset jitters earlier this week triggered by a report saying Israel was making preparations to strike Iranian nuclear facilities and new sanctions announced by the EU and Britain on Russia’s oil trade.
A large crude oil build in the US also weighed on oil prices.
As traders brace for a flood of increased supply in coming months from Opec+, US crude oil storage demand has surged in recent weeks to levels similar to the Covid-19 pandemic, according to data from storage broker The Tank Tiger.
On Friday, the market will watch for US oil and gas rig count data from Baker Hughes that is used as an indicator for future supply.
The market is also closely watching US-Iranian nuclear negotiations which could determine the future supply of Iranian oil. The fifth round of talks will take place in Rome on Friday.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil on track for first weekly loss since April
Renewed supply pressure from another possible Opec+ output hike in July is weighing on the market
Singapore — Oil prices dropped for a fourth consecutive session on Friday and were set for their first weekly decline in three weeks, weighed down by renewed supply pressure from another possible Opec+ output hike in July.
Brent futures fell 31c, or 0.5%, to $64.13 a barrel by 4.12am GMT. US West Texas Intermediate (WTI) crude futures lost 33c, or 0.5%, to $60.87.
For the week, Brent has fallen 1.9%, and WTI has dropped 2.5%, following two weeks of gains.
Both contracts touched their lowest in more than one week on Thursday after a Bloomberg News report that Opec+ was considering another large production increase at a meeting on June 1.
Increasing output by 411,000 barrels a day for July was among the options discussed, but no final agreement has yet been reached, the report said, citing delegates.
“The oil market is under renewed pressure as noise builds around what Opec+ will do with their July output levels,” ING analysts wrote in a research note.
They expect that Opec+ will go ahead with a 411,000 bpd supply increase for July and currently forecast Brent to average $59 a barrel in the fourth quarter.
Opec+, which includes the oil cartel Opec and allies such as Russia, agreed to increase production by nearly 1-million barrels a day in April, May and June.
The supply tailwind offset jitters earlier this week triggered by a report saying Israel was making preparations to strike Iranian nuclear facilities and new sanctions announced by the EU and Britain on Russia’s oil trade.
A large crude oil build in the US also weighed on oil prices.
As traders brace for a flood of increased supply in coming months from Opec+, US crude oil storage demand has surged in recent weeks to levels similar to the Covid-19 pandemic, according to data from storage broker The Tank Tiger.
On Friday, the market will watch for US oil and gas rig count data from Baker Hughes that is used as an indicator for future supply.
The market is also closely watching US-Iranian nuclear negotiations which could determine the future supply of Iranian oil. The fifth round of talks will take place in Rome on Friday.
Reuters
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