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Oil prices fell slightly, today, Monday, after the OPEC+ group agreed to further increase its production targets starting in August, at a time when exports from major producers through the Strait of Hormuz are witnessing a recovery, which may contribute to increasing global supplies.
Oil prices are falling
By 00:10 GMT, Brent crude futures fell 24 cents, or 0.33%, to $71.88 after closing 0.45% higher on Friday.
The price of US West Texas Intermediate crude settled at $68.58 per barrel, a decrease of 11 cents, or 0.16%.
West Texas Intermediate crude contracts were not settled on Friday, as US markets were closed before the Independence Day holiday on Saturday.
The two crude oil prices did not witness any significant change last week, after recording a decline mostly during the past few weeks, as investors closely monitored the talks between the United States and Iran regarding the fate of shipping traffic through the Strait of Hormuz, while following the recovery of oil exports from the Gulf countries.
OPEC+ agrees to increase oil production
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, or the group known as OPEC+, agreed on Sunday to increase production targets by 188,000 barrels per day starting in August, in addition to similar increases in the months of June and July.
However, this increase remained only on paper to a large extent due to the US-Israeli war on Iran, which closed the Strait of Hormuz to the movement of oil tankers of the main OPEC producers, including Saudi Arabia, Kuwait and Iraq, limiting their production.
“The number was broadly in line with expectations,” said Tony Sycamore, market analyst at IG.
He added: “With the UAE’s withdrawal, and in light of the possibility that quotas will not be met yet due to the continued increase in production after the conflict, I am not sure that these numbers mean much at the present time.”
Gulf member states have begun to resume supplies that were halted during the war on Iran, and are increasing exports.
Oil production rises in June
A Reuters poll showed that OPEC oil production in June rose by 3.3 million barrels per day compared to the previous month, reaching 19.43 million barrels per day, recovering from its lowest level in more than two decades.
The data showed that Gulf oil exports in June jumped by more than 3 million barrels compared to May, exceeding 10 million barrels per day, although the volume remained 40% lower than pre-war levels.
In addition, oil shipments from Russia’s western ports hit a record high in June. It is expected to maintain this level in July, as Russian refineries were damaged by Ukrainian drone attacks, forcing Moscow to increase its exports of crude oil, according to sources in the sector.
