Will OPEC+ output hikes push WTI oil below $60 this month?

WTI crude oil prices have fallen for the first time in four sessions, closing at $66.57 per barrel for August delivery. This decline reflects rising U.S. oil inventories and concerns about the impact of unpredictable U.S. trade policies on global growth.

The Energy Information Administration reported a 7.1-million-barrel increase in U.S. commercial oil stocks, despite a drop in gasoline inventories. This indicates that while fuel demand remains strong, overall crude supply is swelling.

How are OPEC+ production increases affecting global oil prices?

OPEC+ has continued to ease production cuts, adding 411,000 barrels per day in July and planning another 548,000 bpd increase in August. This growing output is flooding the market, putting downward pressure on prices.

The cartel’s strategy aims to balance supply with demand, but the rapid return of barrels to the market is unsettling traders and analysts alike.

Did you know?
OPEC+ production cuts began in 2020 as a response to the pandemic-driven oil demand collapse, aiming to stabilize global prices.

What impact do U.S. trade policies have on oil market stability?

Fresh tariff threats from the U.S. administration have added uncertainty. President Trump's announcement of a 50% tariff on copper imports and demands for trade deals by August 1 are unsettling global markets.

These trade tensions risk slowing economic growth, which would reduce oil demand and further depress prices.

ALSO READ | Will Geopolitical Tensions Override OPEC+ Supply Moves in Oil Markets?

OPEC+ ramps up oil output despite market uncertainties

Despite the volatile trade environment, OPEC+ is pressing ahead with output increases. This move signals confidence in demand recovery but also risks oversupply if growth slows.

The market is watching closely for signs that OPEC+ will adjust production if prices fall too far.

Rising U.S. inventories add pressure on crude prices

U.S. commercial crude inventories have surged, reflecting higher production and stockpiling. This inventory build is a key factor behind the recent price drop.

As inventories rise, traders anticipate a potential oversupply scenario that could push WTI prices below the critical $60 mark.

The coming weeks will be crucial in determining whether WTI oil prices can stabilize or if the combined pressures of supply growth and trade policy uncertainty will drive them lower.