Oil prices edged lower on Monday after OPEC+ agreed to raise its production targets again from August, adding to expectations that more crude will reach the global market in the coming months.
The decline also came as oil exports from the Gulf continued to recover after disruptions caused by the recent conflict involving Iran, easing fears over global supplies.
Brent crude futures fell 24 cents, or 0.33 percent, to $71.88 a barrel in early trading. US West Texas Intermediate (WTI) crude slipped 11 cents, or 0.16 percent, to $68.58 a barrel. There was no WTI settlement on Friday because US markets were closed ahead of the Independence Day holiday.
Oil prices were largely stable last week after several weeks of declines. Traders continued to watch developments surrounding shipping through the Strait of Hormuz, a vital route for global oil supplies, while also assessing the pace of recovery in exports from Gulf producers.
On Sunday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed to increase their combined production target by another 188,000 barrels per day from August. The move follows similar increases announced for June and July as the group continues to unwind earlier production cuts.
Despite the latest announcement, analysts believe the additional supply may not have an immediate impact on the market. Production has yet to fully recover following disruptions linked to the recent conflict involving Iran, which affected tanker movements through the Strait of Hormuz and limited exports from major producers including Saudi Arabia, Kuwait and Iraq.
IG market analyst Tony Sycamore said the latest increase was broadly in line with market expectations. He noted that production quotas are still not being fully achieved because output is gradually recovering after the conflict, reducing the immediate significance of the higher targets.
Signs of improving supply are becoming more visible. Gulf producers have restarted shipments that were interrupted during the conflict, helping exports move higher. A Reuters survey showed OPEC’s oil production rose by 3.3 million barrels per day in June from the previous month to 19.43 million barrels per day, recovering from its lowest level in more than two decades.
Data also showed Gulf oil exports climbed by more than 3 million barrels per day in June compared with May, taking total shipments above 10 million barrels per day. Even so, export volumes remained around 40 percent below levels recorded before the conflict.
Meanwhile, Russia has also been adding to global supplies. Oil shipments from its western ports reached a record high in June and are expected to remain elevated this month as damage to domestic refineries from Ukrainian drone attacks has prompted Moscow to export more crude.
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