Oil Prices Rebound After OPEC+ Sticks to Expected Output Hike

Oil prices surged over $1 per barrel in Asian trade on Monday, as OPEC+’s decision to raise output by a modest 411,000 barrels per day (bpd) for July—matching the previous two months—eased market fears of a larger production increase. The outcome provided relief to traders bracing for a potential supply shock.

Brent crude futures climbed 2.33% to $64.24 a barrel by 06:26 GMT, while U.S. West Texas Intermediate (WTI) gained 2.73% to $62.45. Both benchmarks had finished lower last week, pressured by expectations of an aggressive supply hike.

OPEC+’s decision, finalized in a Saturday meeting, marks the third consecutive month of incremental 411,000 bpd increases. While the group had been expected to consider a bigger hike to address global supply concerns, the decision to hold steady was viewed as a strategic move to maintain price stability and discipline over-producers like Iraq and Kazakhstan.

“Had they gone through with a surprise larger amount, then Monday’s price open would have been pretty ugly indeed,” said Harry Tchilinguirian of Onyx Capital Group in a LinkedIn post. Analysts noted the decision was largely priced into markets, with the output increase already factored into Brent and WTI futures.

Kazakhstan, one of the OPEC+ members under scrutiny, has publicly stated it will not scale back production, according to a report by Russia’s Interfax news agency.

Looking ahead, Goldman Sachs anticipates another 410,000 bpd increase for August, citing tight spot oil fundamentals, stronger-than-expected global activity data, and seasonal support for summer fuel demand. “The expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6th,” the bank said in a Sunday note.

Meanwhile, low U.S. fuel inventories and strong gasoline demand ahead of the summer driving season added bullish momentum. ANZ analysts highlighted a near 1 million bpd weekly gain in gasoline implied demand, the third-highest increase in three years. Additionally, the U.S. oil rig count dropped for a fifth straight week, falling by four to 461—the lowest since November 2021—according to Baker Hughes.

The combination of disciplined OPEC+ output increases, strong seasonal demand, and supply jitters from declining U.S. inventories has set the stage for potential price support in the near term, though analysts caution that trade tensions and economic uncertainties remain key factors to watch.