Oil experiences a rebound following OPEC+’s decision to maintain the same output increase for July as was implemented in June. Oil prices saw a resurgence, climbing by more than $1 per barrel, subsequent to OPEC+’s resolution to elevate production by 411,000 barrels per day in July, in accordance with market expectations. Brent crude futures experienced an increase of 1.9%, reaching $63.97 per barrel, whereas U.S. West Texas Intermediate crude saw a rise of 2.14%, settling at $62.09. Oil prices experienced a rebound of over $1 a barrel on Monday following OPEC+’s decision to raise output in July by the same increment as in the preceding two months, aligning with market expectations. Brent crude futures increased by $1.19, representing a 1.9% rise, reaching $63.97 a barrel by 0044 GMT, following a 0.9% decline on Friday. U.S. West Texas Intermediate crude was priced at $62.09 a barrel, reflecting an increase of $1.30, or 2.14%, after experiencing a 0.3% decrease in the prior session. Both contracts experienced a decline exceeding 1% over the course of the week.

The Organization of the Petroleum Exporting Countries and their allies made the decision on Saturday to elevate output by 411,000 barrels per day in July. This marks the third consecutive month that the group, referred to as OPEC+, has opted for this increase, as it seeks to reclaim market share and penalize those who exceed production targets. The group was anticipated to deliberate on a more substantial increase in production. “Had they proceeded with a surprise larger amount, then Monday’s price opening would have been quite unfavorable indeed,” analyst Harry Tchilinguirian of Onyx Capital Group noted on LinkedIn.

Oil traders indicated that the increase of 411,000 barrels per day in output had already been factored into the pricing of Brent and WTI futures. Looking ahead, analysts noted that low levels of U.S. fuel inventories have heightened supply concerns in anticipation of an above-average hurricane season. “More encouraging was a significant surge in gasoline implied demand as the U.S. driving season approaches,” ANZ analysts noted, highlighting that the increase of nearly 1 million bpd marked the third-highest weekly rise in the past three years.

Market participants are meticulously observing the ramifications of declining prices on U.S. crude production, which reached a record high of 13.49 million bpd in March. In the latest weekly report from Baker Hughes, it was noted that the count of operational oil rigs in the United States has decreased for the fifth consecutive week, declining by four to a total of 461. This figure represents the lowest level observed since November 2021.