Prices declined on Monday due to reduced geopolitical tensions in the Middle East and the possibility of another OPEC+ production increase in August, which boosted supply expectations despite ongoing uncertainty about global demand.
According to a Reuters report, Brent crude futures dropped by 13 cents, or 0.19%, to $67.64 per barrel ahead of the August contract’s expiration later on Monday. Meanwhile, the more actively traded September contract declined by 18 cents to $66.62.
US West Texas Intermediate (WTI) crude fell by 32 cents, or 0.49%, to $65.20 per barrel.
Last week, both crude benchmarks recorded their steepest weekly drop since March 2023. However, they are on track to end June with a gain of over 5% for the second consecutive month.
Brent prices surged past $80 per barrel earlier this month after the Israel-Iran conflict that began on June 13, prompting US involvement. However, prices fell sharply to $67 following a ceasefire announcement by President Donald Trump.
“The market has priced out most of the geopolitical risk premium following the Iran-Israel ceasefire,” said Tony Sycamore, analyst at IG Markets.
Contributing to the downward pressure, four OPEC+ delegates revealed that the group is planning to increase production by 411,000 barrels per day in August. This would mark the fourth consecutive monthly hike, following similar output increases in May, June, and July. The final decision is expected at the upcoming OPEC+ meeting on July 6.
Persistent concerns about weakening global demand, especially from China, continue to pressure prices.
“Uncertainty around global growth continues to cap prices,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
China’s factory activity shrank for the third month in June, as weak domestic demand and sluggish exports, amid ongoing U.S. trade tensions, impacted manufacturing output.
In the US, the number of active oil rigs fell by six to 432 last week, marking the lowest count since October 2021, according to Baker Hughes.
