Oil prices fall amid OPEC+ production surge, weaker global demand

(MENAFN) Oil prices extended their decline in early trading on Monday as market participants weighed the implications of a planned increase in OPEC+ oil production starting in October. Brent crude futures fell by 57 cents, or 0.7 percent, to USD76.36 per barrel, while West Texas Intermediate (WTI) crude futures dropped 50 cents, or 0.7 percent, to USD73.05 per barrel. These losses follow a decrease of 0.3 percent in Brent crude and 1.7 percent in WTI crude from the previous week.

The downward pressure on oil prices comes in the context of anticipated production increases by the OPEC+ alliance. Sources within OPEC+ have indicated that the group is poised to raise its production by 180,000 barrels per day starting in October, which marks the beginning of a gradual easing of a 2.2 million barrels per day production cut. This increase aims to address the current supply constraints while balancing production cuts that are scheduled to persist until the end of 2025.

In Libya, the Arabian Gulf Oil Company has resumed production at a rate of up to 120,000 barrels per day to fulfill domestic needs, although exports remain suspended due to a shutdown of most oil fields caused by disputes between armed factions. Despite these disruptions, oil prices have struggled with two consecutive months of declines, driven by weakening economic conditions in China and the United States. Additionally, U.S. oil consumption in June fell to its lowest seasonal level since the COVID-19 pandemic, reflecting broader concerns about global oil demand amidst rising geopolitical tensions and weak economic data. 

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