WTI slumps to near $65.00 as OPEC+ hikes August output larger than expected

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

  • The WTI price faces some selling pressure to near $65.00 in Monday’s Asian session. 

  • OPEC+ members agreed to increase oil production by 548,000 barrels a day in August. 

  • Concerns about oversupply undermine the WTI price. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.00 during the early Asian trading hours on Monday. The WTI price slumps after the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to a bigger-than-expected production increase in August. 

OPEC+ agreed on Saturday to hike their collective crude production by 548,000 barrels per day (bpd), as they continue to unwind a set of voluntary supply cuts, per Bloomberg. This is faster than the 411,000 bps expected. The group previously announced hikes of 411,000 bpd for May, June, and July, already three times faster than scheduled. Oversized output hikes have raised concerns about oversupply, which could weigh on the WTI price in the near term.

"The increased production clearly represents a more aggressive competition for market share and some tolerance for the resulting decline in price and revenue," said Tim Evans of Evans Energy in a note. 

US Treasury Secretary Scott Bessent said Sunday that tariffs imposed in April would go into effect on August 1 for nations that have not negotiated a trade deal with President Donald Trump's administration. His remarks follow Trump's announcement last week that the government will send around a dozen letters to trade partners on Monday informing them of their tariff rates beginning August 1. The fears of the oil demand outlook might contribute to the WTI’s downside. 

On the other hand, geopolitical risks in the Middle East, a globally significant region for oil production, might help limit the WTI’s losses. Israel stated late Sunday that the country’s military had attacked Houthi targets at three ports and a power plant in Yemen. Defence Minister Israel Katz confirmed the attack, saying they were carried out due to repeated attacks by the Iranian-backed rebel group on Israel.

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
WTI wobbles around $66 as Trump’s tariff deadline looms largeWest Texas Intermediate (WTI), futures on NYMEX, trades cautiously near $66.00 during the European trading session on Friday.
Author  FXStreet
Jul 04, Fri
West Texas Intermediate (WTI), futures on NYMEX, trades cautiously near $66.00 during the European trading session on Friday.
placeholder
WTI falls to near $66.00 due to concerns over weakening Oil demandWest Texas Intermediate (WTI) Oil price extends its losses for the second successive session, trading around $66.10 per barrel during the Asian hours on Friday.
Author  FXStreet
Jul 04, Fri
West Texas Intermediate (WTI) Oil price extends its losses for the second successive session, trading around $66.10 per barrel during the Asian hours on Friday.
placeholder
WTI tumbles below $66.50 on surprise build in US stockpilesWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $66.40 during the early Asian trading hours on Thursday.
Author  FXStreet
Jul 03, Thu
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $66.40 during the early Asian trading hours on Thursday.
placeholder
WTI trades with a negative bias within one-week-old range, just above mid-$64.00sWest Texas Intermediate (WTI) US Crude Oil prices down less than 0.50% for the day heading into the European session on Wednesday.
Author  FXStreet
Jul 02, Wed
West Texas Intermediate (WTI) US Crude Oil prices down less than 0.50% for the day heading into the European session on Wednesday.
placeholder
WTI edges lower below $65.00 as traders brace for OPEC+ decisionWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.85 during the early Asian trading hours on Wednesday.
Author  FXStreet
Jul 02, Wed
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.85 during the early Asian trading hours on Wednesday.
Real-time Quote