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.
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