Oil prices fall over 1% on Monday

Oil prices fell by more than 1 per cent on Monday after OPEC+ agreed to raise its production target for August and crude exports through the Strait of Hormuz continued to recover, adding to expectations of higher global supply.

Brent crude futures dropped $1.02, or 1.41 per cent, to $71.10 a barrel by 0756 GMT, while US West Texas Intermediate (WTI) crude fell 80 cents, or 1.16 per cent, to $67.89 a barrel.

The Organisation of the Petroleum Exporting Countries and its allies, including Russia, agreed on Sunday to increase production targets by 188,000 barrels per day from August, following similar increases in June and July. Analysts said the additional supply, combined with recovering Gulf exports, weighed on prices despite expectations that lower oil prices could eventually support demand.

Exports from Gulf producers rose by more than 3 million barrels per day in June from May to exceed 10 million barrels per day, although they remained about 40 per cent below pre-conflict levels.

Meanwhile, Abu Dhabi National Oil Company sold about 16 million barrels of crude at wider discounts in its fifth spot tender since June, highlighting increased spot market supply.

ANZ revised its outlook for global oil demand, forecasting a contraction of 1.5 million barrels per day in 2026 due to a sharper-than-expected slowdown in the second quarter. The bank said demand losses are expected to ease in the second half of the year as supply improves and delayed consumption returns.

Russia also continued to boost crude exports, with shipments from its western ports reaching a record high in June and expected to remain elevated in July after Ukrainian drone attacks disrupted domestic refinery operations.

Attribution: Reuters