Oil Rebounds as Markets Assimilate OPEC+ Output Raise
Oil rebounded in the global commodity market after a sharp drop triggered by Organisation of Petroleum Exporting Countries and allies’ (OPEC+) announcement to increase production amid ongoing concerns about oversupply.
The markets weighed the increased supply with demand patterns with the expectation that China’s demand will pick up and uncertainties in the US will ease. Brent crude rose by around 1.94%, trading at $61.42 per barrel. The US benchmark West Texas Intermediate (WTI) rose about 2.01%, reaching $58.15 per barrel, up from $57 in the previous session.
Prices rebounded on profit-taking after hitting their lowest level since February 2021 on Monday, following a decision by eight members of OPEC+ to ramp up production. Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman announced on Saturday that they will increase oil production in June by 411,000 barrels per day compared to May levels, gradually reversing voluntary output cuts.
Top producers Saudi Arabia and Russia will lead the increase, which analysts say signals a substantial rise in global oil supplies in the coming months. In addition to bargain-hunting by investors, anticipation over the US Federal Reserve’s (Fed) upcoming policy decision also contributes to the upward pressure on oil prices.
While markets widely expect the Fed to hold interest rates steady, pricing suggests a 72% chance of a rate cut in July, an outlook that could weaken the US dollar, boost oil demand, and support higher prices.
Meanwhile, concerns that US President Donald Trump’s protectionist trade policies could hamper global economic growth and curb oil demand are limiting further gains in prices. On Sunday, Trump called for a 100% tariff on all films produced outside the United States.
‘WE WANT MOVIES MADE IN AMERICA, AGAIN!’ the president posted on social media. It confused many in Hollywood, which has lost plenty of film and television production to other states — such as Louisiana and Texas — and nations that offer greater tax credits and cheaper labor.
Analysts noted that although the tariff hike was postponed nearly a month ago, no concrete progress has been made on trade agreements, adding that lingering uncertainty continues to weigh on companies’ long-term supply and trade strategies.
OPEC+ Supply
Eight OPEC+ nations — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman — will boost oil production by 411,000 barrels per day (bpd) in June, compared to May levels, as part of a plan to gradually unwind voluntary output cuts, the group said Saturday following a virtual meeting.
OPEC stated that low oil inventories continue to signal healthy market fundamentals, supporting the gradual rollback of voluntary supply reductions. The June increase is part of a phased return of 2.2 million bpd in voluntary cuts, a process first outlined in a decision made on December 5, 2024. The 411,000 bpd adjustment reflects the cumulative total of three monthly increments.
OPEC+ noted that the pace of the production increase could be paused or reversed, depending on evolving market conditions. The next meeting, set for June 1, will determine output levels for July.
On April 3, the group confirmed it would begin lifting the voluntary cuts starting in May, with a 411,000 bpd increase. That move, coupled with US trade tariffs, pushed oil prices below $60 a barrel — their lowest point in four years. #Oil Rebounds as Markets Assimilate OPEC+ Output Raise Selloffs: Nigeria’s Sovereign Eurobond Yield Rises to 10.6%
