Oil prices fell more than $2 a barrel in Asian trade on Monday as OPEC+ is set to further speed up oil output hikes, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook.
Brent crude futures dropped $2.21, or 3.61%, to $59.08 a barrel by 0653 GMT while U.S. West Texas Intermediate crude was at $56.00 a barrel, down $2.29, or 3.93%.
Both contracts touched their lowest since April 9 at Monday’s open after OPEC+ agreed to accelerate oil production hikes for a second consecutive month, raising output in June by 411,000 barrels per day (bpd).
The June increase from the eight will take the total combined hikes for April, May and June to 960,000 bpd, representing a 44% unwinding of the 2.2 million bpd of various cuts agreed on since 2022, according to Reuters calculations.
“The May 3 OPEC+ decision to raise production quotas another 411,000 bpd for June adds to the market expectation that the global supply/demand balance is moving to a surplus,” Tim Evans, founder of Evans on Energy said in a note.
