Oil Drops for Second Day as Traders Brace for Another OPEC+ Hike
(Bloomberg) -- Oil fell for a second day in the lead up to an OPEC+ meeting at the weekend that’s expected to deliver another substantial production hike, threatening to swell a glut that’s forecast for this half.
Brent fell toward $68 a barrel after losing 0.4% on Thursday, while West Texas Intermediate traded below $67. The cartel has begun discussing a fourth, 411,000 barrel-a-day increase for August ahead of a video-conference this weekend, delegates said. That is triple the initially scheduled rate.
Global trade policy was in also in focus, as stocks in Asia fell, along with equity-index futures. US President Donald Trump said that his administration will begin sending out letters to trading partners to set unilateral tariff rates ahead of a July 9 deadline. He said countries would start to pay the new levies in August.
Crude has been volatile in recent weeks, roiled by fears that the Israel-Iran war would hamper supply, with Brent spiking above $81 a barrel last month. While markets have since calmed, deep concerns linger on possible negotiations with Iran, the US-led trade talks, as well as evolving policy by OPEC+.
“While any surprise from OPEC+ could jolt prices temporarily, the broader backdrop — challenged macro conditions and trade-related demand uncertainty — may cap upside,” said Charu Chanana, chief investment strategist at Saxo Markets Ltd. “Softening demand signals and rising supply are building a bearish narrative.”
There have been talks to shift the virtual session of the Organization of the Petroleum Exporting Countries and allies to Saturday from Sunday, several delegates said. The group will add output until its market share returns to 28% to 30%, with markets facing a surplus of as much as 600,000 barrels a day this quarter, according to Bloomberg Intelligence analyst Henik Fung.
On Iran, Washington plans to restart nuclear talks, and US Middle East envoy Steven Witkoff is set to meet Foreign Minister Abbas Araghchi in Oslo next week, Axios reported. Meanwhile, the US took fresh steps to restrict the trade of the Islamic Republic’s oil, keeping up pressure on Tehran.
In Canada, a wildfire emerged in the Fort McMurray area, about 20 kilometers (12 miles) from a major oil-sands production site. Production from Alberta fell to the lowest in two years in May, combining with falling output from Mexico and a ban on Venezuelan flows to strengthen heavy crude prices.
Oil markets are seeing thinner trading on Friday because of the US holiday, with lower than usual volumes changing hands in the Asian session.
©2025 Bloomberg L.P.
