Oil prices are on track for their first weekly decline in over a month, as Brent crude dipped below $64 per barrel and West Texas Intermediate slid under $61. The downturn, marking a fourth consecutive session of losses, is attributed to expectations of increased output from the Organisation of the Petroleum Exporting Countries and its allies , coupled with signs of a global supply surplus.
Delegates within OPEC+ have discussed a potential production increase of 411,000 barrels per day for July, although no formal agreement has been reached. This prospective hike follows earlier decisions to raise output by nearly 1 million barrels per day through April to June. Analysts suggest that the alliance’s strategy aims to balance market share and revenue needs, but it risks exacerbating an already oversupplied market.
The anticipated production boost comes amid growing concerns over weakening demand. Economic indicators point to a slowdown in major economies, with trade tensions and inflationary pressures dampening consumption. Additionally, U.S. crude inventories have seen unexpected builds, further indicating a potential glut.
Financial institutions have adjusted their forecasts in response to these developments. Barclays has lowered its Brent crude price projection for 2025 by $4 to $66 per barrel, citing the accelerated output plans and softening demand. Similarly, Goldman Sachs has reduced its year-end forecast for Brent by $5, now expecting it to average $71 per barrel, reflecting subdued demand growth and increased OPEC+ supply.
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