Oil Prices Ease as Demand Slows, OPEC+ Output Rises

Oil Prices Ease as Demand Slows, OPEC+ Output Rises

Oil prices declined in the global commodity market on Wednesday amidst a slowdown in aggregate demand, with data showing the Organisation of Petroleum Exporting Countries and allies members (OPEC+) pumped more in June.

The market also react to uncertainty over the US Federal Reserve’s (Fed) interest rate outlook, following the release of inflation data and expectations of steady global supply.

Brent crude decreased by around 0.17%, trading at $68.17 per barrel, while the US benchmark West Texas Intermediate (WTI) crude decreased by 0.16%, settling at $65.55 per barrel, compared to $65.66 in the prior session.

US consumer prices rose 0.3% in June from the previous month, in line with expectations, while the annual rate accelerated to 2.7%, exceeding forecasts. It marked the highest monthly increase since January and the strongest year-on-year rise since February.

Core consumer prices, which exclude food and energy, rose 0.2% in June from the previous month and 2.9% from a year earlier, both slightly below market expectations of 0.3% and 3%, respectively.

The inflation uptick tempered expectations for a Fed rate cut in September, although markets still anticipate two cuts by year-end. High interest rates typically strengthen the US dollar, making oil more expensive for holders of other currencies and curbing demand.

Additionally, data showing a rise in crude oil production by the Organization of the Petroleum Exporting Countries (OPEC) eased supply concerns and added to the downward pressure on prices.

According to OPEC’s monthly oil market report, the group’s crude production rose by 220,000 barrels per day (bpd) in June to 27.02 million bpd. Total output from the broader OPEC+ alliance, which includes non-OPEC producers, increased by 349,000 bpd to 41.56 million bpd.

In addition, OPEC maintained its forecast for global oil demand growth this year, projecting an increase of about 1.3 million bpd from last year to reach 105.13 million bpd. Expectations of steady demand amid rising supply strengthened concerns over a potential market oversupply, further weighing on prices.

Meanwhile, the American Petroleum Institute reported a sharp rise in US crude inventories, with stocks increasing by 19.1 million barrels last week, compared to expectations for a 2 million-barrel decline.

The unexpected buildup fueled concerns over weakening demand in the world’s largest oil consumer, adding to the downward pressure on prices. The US Energy Information Administration is scheduled to release official inventory data later in the day.

Crude oil production by the Organization of the Petroleum Exporting Countries (OPEC) rose by 220,000 barrels per day (bpd) in June compared to the previous month, reaching 27.23 million bpd, according to the group’s latest Monthly Oil Market Report.

The report showed that the largest output increase came from Saudi Arabia, while Iran recorded the biggest decline. Saudi Arabia, the group’s top producer, increased its output by 173,000 bpd to 9.35 million bpd. Iran’s production, meanwhile, declined by 62,000 bpd to 3.24 million bpd.

As a result, total OPEC crude output stood at 27.23 million bpd in June. Meanwhile, total crude production by the OPEC+ group – which includes non-OPEC producers – rose by 349,000 bpd to 41.56 million bpd during the same period.

OPEC kept its forecast for global oil demand growth in 2025 unchanged, projecting an increase of around 1.3 million barrels per day (bpd) year-on-year to reach 105.13 million bpd.

Most of the growth is expected to come from non-OECD countries, where demand is projected to rise by 1.16 million bpd, while demand in OECD countries is forecast to grow by only 140,000 bpd. Total demand from non-OECD countries is estimated at 59.33 million bpd, with OECD countries accounting for the remaining 45.8 million bpd.

For 2025, global oil demand is forecast to rise by a similar margin of 1.28 million bpd, reaching 106.42 million bpd. In 2026, demand growth is expected to be around 1.2 million bpd in non-OECD countries and just 80,000 bpd in OECD economies. Zenith Bank Now Value at N3trn in Nigerian Bourse