Oil prices tumble as OPEC+ boosts supply amid weak demand
Oil prices on the New York exchange fell following the decision by the OPEC+ oil cartel to increase crude supply. This increase in supply comes at a time when global energy demand is weakened by the trade war initiated by U.S. President Donald Trump.
Oil prices on the New York exchange recorded a significant drop after the countries in the OPEC+ alliance decided to further increase crude supply.
As a result, West Texas Intermediate crude oil for June deliveries was priced at $56.16 per barrel on Monday morning, representing a 3.65% decrease. Meanwhile, Brent crude for July deliveries was priced at $59.25 per barrel, marking a 3.33% decline.
What did OPEC+ decide?
During the Saturday meeting, OPEC+ countries decided to increase oil supply by 411,000 barrels per day in June, marking the second consecutive month of increases. Saudi Arabia, the leader of the oil cartel, warned group members who exceed the established production limits that they might face further increases in supply.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, continues to maintain production cuts at nearly 5 million barrels per day. Many of these cuts are expected to remain in place until the end of 2026. The next full ministerial meeting of the group is scheduled for May 28.
Ajay Parmar, director of oil market analytics at ICIS, noted that "production increase, instigated by Saudi Arabia, is as much about challenging U.S. shale supply as it is to penalize members that have benefited from higher prices while flaunting their production limits."
The expert also noted that "the oil market has been dealing with significant demand uncertainty amid tariff risks."
