Oil prices extended their slide during Asian trade on Monday after OPEC+ confirmed plans to significantly boost production in September, while worries over a weakening United States economy, the world's largest oil consumer, weighed further on market sentiment.
By 3:00 pm AEST (5:00 am GMT) Brent crude futures were down 10 cents or 0.1%, at US$69.57 per barrel, while U.S. West Texas Intermediate (WTI) crude eased 5 cents or 0.1% to $67.28.
Both benchmarks had shed around 2.8% on Friday.
The latest declines came after the Organisation of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed on Sunday to raise output by 547,000 barrels per day starting in September.
The move follows a series of accelerated production hikes this year aimed at regaining market share. The group cited “a steady global economic outlook” and “low oil inventories” as justification for the increase.
The decision was widely anticipated and effectively reverses the largest portion of OPEC+'s voluntary output cuts implemented in 2023. A separate production increase for the United Arab Emirates brings the total output hike to around 2.5 million barrels per day, or about 2.4% of global demand.
ANZ analysts, in a note to clients, said: "We expect them to complete the unwind by announcing another huge increase in output for September at the meeting. The combination of a weakening economic outlook and rising supply is likely to lead to further downward pressure on prices."
Despite the production ramp-up, geopolitical tensions remain in focus. Investors are closely watching the possibility of fresh U.S. sanctions on oil exports from Iran and Russia.
President Donald Trump has threatened to impose 100% secondary tariffs on buyers of Russian crude, in an effort to pressure Moscow to end its war in Ukraine.
However, resistance to these measures persists. Two Indian government officials told Reuters on Saturday that India will continue purchasing Russian oil despite Trump's threats.
Meanwhile, last week’s disappointing U.S. jobs data intensified concerns that trade-related tensions and slowing economic activity may hurt global fuel demand.
