Oil prices fell to their lowest levels in a week as OPEC+ agreed to increase output by 547,000 barrels per day in September, adding to oversupply concerns. The agreement, which marks a full reversal of the group’s largest tranche of output cuts, settled at $68.76 a barrel for Brent crude futures.
The US government released data showing the weakest gasoline demand since the COVID-19 pandemic in May, further fueling concerns about global oversupply. Oil traders are now hedging for potential further supply increases from OPEC+, with discussions to unwind 1.65 million bpd of cuts at the group’s next meeting on September 7.
Analysts predict the actual increase in supply will be around 1.7 million bpd, as other members cut output after overproducing. Investors are also watching US President Donald Trump’s decision on Russia, with potential tariffs on Indian buyers of Russian oil set to take effect. The market is now closely monitoring whether OPEC+ will tap into its spare production capacity.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed on Sunday to increase oil production by 547,000 barrels per day in September. This move comes after US data showed lacklustre fuel demand in May, marking a full reversal of the group’s largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of global demand.
OPEC+ retains a substantial amount of spare production capacity, with analysts warning that markets are now watching closely to see whether the group will tap into it. The move has sparked concerns among investors and traders, who are now hedging for potential further supply increases from OPEC+.
Source: https://www.reuters.com/business/energy/oil-falls-opec-output-hike-adds-oversupply-concerns-2025-08-03