Oil prices fell by more than $2 a barrel in early Asian trading on Monday, amid OPEC+'s intention to further accelerate oil production growth, raising concerns about increased supply, UNN reports, citing Reuters.
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Brent crude futures fell $2.04 a barrel, or 3.33%, to $59.25 a barrel by 22:40 GMT (01:40 Kyiv time), while U.S. West Texas Intermediate crude cost $56.19 a barrel, down 3.6%.
Both contracts hit their lowest levels since April 9 in Monday's opening trade after OPEC+ agreed to accelerate oil production growth for the second month in a row, increasing production by 411,000 barrels per day in June.
Reuters estimates that the June increase from eight will bring total cumulative increases for April, May and June to 960,000 bpd, or 44% of the 2.2 million bpd of various cuts agreed since 2022.
"The OPEC+ decision on May 3 to increase production quotas by another 411,000 barrels per day for June reinforces market expectations that the global supply and demand balance is moving towards a surplus," Tim Evans, founder of Evans on Energy, said in a note.
The group may completely cancel its voluntary cuts by the end of October if members do not improve compliance with their production quotas, OPEC+ sources said.
OPEC+ sources said Saudi Arabia is pushing OPEC+ to accelerate the lifting of earlier production cuts to punish its colleagues in the organization, Iraq and Kazakhstan, for not properly complying with their production quotas.
Barclays lowered its Brent forecast by $4 to $66 a barrel for 2025 and by $2 to $60 a barrel for 2026 due to the accelerated deployment of OPEC+ supplies, analyst Amarpreet Singh said in a note.
Meanwhile, tensions flared in the Middle East after Israeli Prime Minister Benjamin Netanyahu vowed to retaliate against Iran for the Tehran-backed Houthi group firing a missile that landed near Israel's main airport.
Iranian Defense Minister Aziz Nasirzadeh said on Sunday that Tehran would retaliate if the United States or Israel attacked.