The price of oil More than 4% collapses after the OPEC+ announced an additional supply of 411,000 barrels per day in June. After the publication of the figures, Riad warned that more increases in the future could be coming. After the announcement, the price of oil has fallen to $ 60.05, marking minimals that were not seen since 2021.
The price of oil signs minimum
The increase in OPEC+ production is produced despite theat the fall in prices caused by fear of excess supply and economic weakness related to Donald Trump’s commercial war. Saudi Arabia justifies the last increase in the OPEC+ offer with an effort to discipline the group members who have repeatedly breached their quota commitments, with Kazakhstan and Iraq in the sight. In addition, it seems to seek the good will of the US government, whose objective is reduce as much as possible the price of oil to soften the effects of inflation, favoring the type cuts by the Fed, which this week will decide on interest rates.
The OPEC+ already surprised the market last month by announcing an increase in the production of the same magnitude, more than triple of the expected. The combination of the increase in the offer of OPEC+ and the fear that US trade tariffs harm the world economy caused the price of Brent oil to fall almost a fifth in April, the largest monthly drop in almost three and a half years.
These more aggressive supply increases by OPEC+ imply that the oil surplus will be advanced, which will leave the market in surplus throughout 2025. The key to knowing how far the Saudis will arrive in what begins to look like a price war is the country’s low oil prices
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