KUALA LUMPUR: Oil prices steadied on Tuesday after falling to their lowest levels since February 2021 in the previous session, as OPEC+’s decision to accelerate production hikes continued to raise concerns over a potential supply glut amid fragile global demand.
Brent crude edged up 10 cents to USD60.33 a barrel by 0050 GMT, while US West Texas Intermediate (WTI) crude also rose 10 cents to USD57.23. Both benchmarks had settled on Monday at their lowest in over four years.
The market reacted to OPEC+’s announcement on Saturday of a further ramp-up in output for a second straight month. The group committed to increasing production in June by 411,000 barrels per day (bpd), bringing the cumulative hike across April, May and June to 960,000 bpd. This marks a 44 per cent rollback of the 2.2 million bpd in voluntary cuts introduced since 2022, according to Reuters estimates.
OPEC+ sources indicated that the group could fully unwind these voluntary cuts by October should compliance with production quotas remain weak.
Meanwhile, US shale producer Diamondback Energy revised down its output forecast for 2025, citing increased market uncertainty and rising OPEC+ supply as key pressures challenging the trajectory of US production growth.
In Washington, Treasury Secretary Scott Bessent reiterated that President Donald Trump’s policy agenda – including tariffs, tax reductions, and deregulation – would support long-term investment, stating that financial markets remain “anti-fragile” despite short-term volatility.
The Federal Reserve is expected to hold interest rates steady at its upcoming policy meeting on Wednesday, as the evolving tariff landscape continues to weigh on the broader economic outlook.
Barclays revised its Brent crude forecast downwards by USD4 to USD70 a barrel for 2025 and projected USD62 for 2026, citing a challenging path ahead for market fundamentals amid heightened trade tensions and OPEC+’s shifting strategy.
–Reuters
