Oil prices gained over $1 a barrel on Monday after OPEC+ chose to raise output in July by the same amount as in the preceding two months.
After closing 0.9% down on Friday, Brent crude futures increased $1.34, or 2.13%, to $64.12 a barrel by 03:46 GMT. After dropping 0.3% the day before, U.S.
West Texas Intermediate crude was up $1.52, or 2.5%, at $62.31 per barrel.
Last week, both contracts had a decline of over 1%.
In an effort to regain market share and penalize over-producers, the Organization of the Petroleum Exporting Countries and its allies decided on Saturday to boost output by 411,000 barrels per day in July.
This is the third consecutive month that the group, known as OPEC+, has increased output by the same amount.
It was anticipated that the committee will talk about a larger production increase.
Onyx Capital Group analyst Harry Tchilinguirian posted on LinkedIn, “Monday’s price open would have been pretty ugly indeed if they had gone through with a surprise larger amount.”
The 411,000-bpd increase in output has already been priced into Brent and WTI futures, according to oil traders.
“Punishing OPEC+ members like Iraq and Kazakhstan that have consistently produced above their pledged quotas has been the headline motive,” the Commonwealth Bank of Australia stated in a note on Monday.
Russia’s Interfax news agency reported Thursday that Kazakhstan’s deputy energy minister said the country has told OPEC it has no plans to cut its oil production.
Goldman Sachs analysts predict that in August, OPEC+ will carry out a final output increase of 0.41 million barrels per day.
