Oil prices fell to their lowest in a week on Monday after OPEC+ agreed to another large output increase in September, though traders remained wary of further sanctions on Russia.
Brent crude futures fell $1.17, or 1.7%, to $68.50 a barrel. U.S. West Texas Intermediate crude declined $1.26, or 1.9%, to $66.07. Both contracts lost about $2 on Friday.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day (bpd) for September.
The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marks a full and early reversal of the group’s largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of global demand.
Investors also continued to digest the impact of the latest U.S. tariffs on exports from dozens of trading partners and remain wary of further U.S. sanctions on Russia.
U.S. President Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine.
According to Mohammed Imran | Research Analyst | Mirae Asset Sharekhan, OPEC’s move marks the completion of the 2.2 million bpd production cuts initiated in 2023. The group’s cautious approach to restoring supply reflects concerns over potential market tightening due to geopolitical risks, particularly as the US and EU plan to impose secondary sanctions on Russian energy exports.
Meanwhile, US oil rig activity continues to decline, despite relatively stable prices in recent weeks. The rig count fell by 7 last week to 415, marking the lowest level since September 2021. This represents the 13th consecutive weekly decline, with rig activity down nearly 13% over the period, indicating a cautious stance from US producers amid uncertain demand and pricing outlooks.
Analysts expect short-term price rallies driven by geopolitical developments. However, the demand outlook remains weak, limiting the sustainability of any upward momentum. With OPEC+ increasing supply amid a tariff-driven economic slowdown, the medium- to long-term outlook for crude oil remains bearish. WTI Support : $65 , Reseistance : $68MCX Crude : Support – 5685 , Resistance 6050
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