George Pavel

Crude oil futures have declined significantly as OPEC+ moves to accelerate its output increases, indicating growing supply concerns. The group agreed to raise production by 411,000 barrels per day in June, which, combined with previous hikes, results in a total of 960,000 bpd added between April and June. This decision has raised expectations of an oversupplied market, further compounded by Saudi Arabia’s push to penalize non-compliant members. As a result, oil prices could remain under significant pressure. The outlook for oil prices has been revised lower on growing supply surplus concerns, despite a slower rate of growth in U.S. production.

At the same time, the demand outlook remains uncertain, exacerbated by geopolitical tensions and trade risks. In this regard, traders could continue to monitor developments around U.S. trade policy and their impact on economic growth. Attention could also turn to this week’s U.S. and Chinese economic data in addition to U.S. crude inventories figures, to gauge the direction of oil demand.

Pavel is General Manager at Naga.com Middle East