Cartel surprises. Oil prices fall after OPEC+ decision

Oil prices on the New York Stock Exchange are falling following a surprising decision for fuel markets by the OPEC+ alliance regarding the level of oil supplies in August, brokers report.

A barrel of West Texas Intermediate crude for delivery on VIII is trading at $66.30 on the NYMEX in New York, down 1.04 percent.

Brent on ICE on IX is trading at USD 68.04 per barrel, down 0.38 percent.

Investors were eagerly awaiting the weekend meeting of the OPEC+ alliance, during which a decision on the production policy of this group of countries for August was to be made.

The market expected OPEC+ to agree to increase production by 411,000 barrels per day.

Meanwhile, OPEC+ alliance countries have agreed to a larger increase in oil production, raising concerns about oversupply of the raw material on oil markets.

The Saudi-led group agreed Saturday to increase oil supply by 548,000 barrels a day in August, a decision made in just 10 minutes via video conference.

OPEC+ officials estimate that additional barrels of oil from the alliance could be "absorbed" by the market during the summer season and higher demand for fuels. In addition, President Donald Trump's recent call for lower oil prices may be fulfilled.

"For now, the oil market remains tight, which suggests it can absorb additional OPEC supply," said Giovanni Staunovo, an analyst at UBS.

"However, various risks are growing, such as trade tensions, which could make the oil market less tense in the next 6-12 months, and this would create opportunities for oil price declines," he added.

Analysts point out that lower oil prices are good news for consumers, but at the same time pain for producers of the raw material - both those from OPEC+ and American suppliers of shale oil.

The International Energy Agency (IEA) estimates that the surplus of crude oil in global fuel markets could amount to about 1.5 percent of global consumption of this raw material in the fourth quarter of 2025.

Brent crude oil has fallen 11% in the past two weeks, quickly ignoring the threats posed by the Israel-Iran Middle East conflict.

Analysts at Goldman Sachs Group Inc. and JPMorgan Chase & Co. are predicting further declines in oil prices – towards $60/b this year, as fuel consumption in China weakens and US President Donald Trump's tariffs "cast a shadow" on the global economy. (PAP Biznes)

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