Oil prices saw a decline of 1% on Monday, driven by diminishing geopolitical tensions in the Middle East and expectations of an OPEC+ production boost in August. Brent crude futures declined to $67.11 per barrel, whereas U.S. West Texas Intermediate crude decreased to $64.58. Notwithstanding the decline observed last week, both benchmarks are set to achieve a second consecutive monthly gain in June. Oil prices declined by 1% on Monday, influenced by a reduction in geopolitical risks in the Middle East and the anticipation of an additional OPEC+ output increase in August, which improved the supply outlook.

Brent crude futures experienced a decline of 66 cents, representing a 0.97% decrease, settling at $67.11 per barrel by 0031 GMT, as the August contract approaches its expiry later on Monday. The more actively traded September contract stood at $65.97, reflecting a decline of 83 cents. U.S. West Texas Intermediate crude experienced a decline of 94 cents, representing a decrease of 1.43%, settling at $64.58 per barrel. Last week, both benchmarks experienced their most significant weekly drop since March 2023; however, they are poised to conclude June with a second consecutive monthly increase exceeding 5%.

A 12-day conflict initiated by Israel’s assault on Iran’s nuclear installations on June 13 led to a spike in Brent prices exceeding $80 per barrel, following U.S. bombings of these facilities. Subsequently, prices fell to $67 after President Donald Trump declared a ceasefire between Iran and Israel. The market has eliminated a significant portion of the geopolitical risk premium that had been incorporated into prices after the Iran-Israel ceasefire, according to IG markets analyst Tony Sycamore in a recent note.

Adding to the market’s pressures, four delegates from OPEC+, comprising allies of the Organization of the Petroleum Exporting Countries, indicated that the group plans to increase production by 411,000 barrels per day in August, mirroring similar output hikes for May, June, and July. OPEC+ is scheduled to convene on July 6, marking the fifth consecutive monthly increase since the group initiated the unwinding of production cuts in April. In the United States, the count of active oil rigs, which serves as a predictor of forthcoming production levels, decreased by six to reach 432 last week, marking the lowest figure since October 2021, according to Baker Hughes.