Oil prices edged higher on Monday amid growing speculation that the Organization of the Petroleum Exporting Countries and allies (OPEC+) will move to increase production this week.
By 7:27 AM WAT, Brent crude futures had risen by 20 cents (0.31%) to $64.98 per barrel, while U.S. West Texas Intermediate (WTI) gained 24 cents (0.39%) to $61.77 a barrel.
The gains follow a 0.5% increase for both benchmarks on Friday, marking a continued recovery in crude markets.
OPEC+ is expected to increase output by 411,000 barrels per day (bpd) for July, building on a previously agreed supply hike of 1 million bpd spread across April, May, and June.
The alliance is also considering completely unwinding its remaining 2.2 million bpd voluntary production cut by October, signaling a major shift in policy after more than a year of supply restraints.
Since late 2022, OPEC+ members led by Saudi Arabia and Russia have withheld substantial volumes from the market in an attempt to stabilize falling prices. However, the group appears to be accelerating its planned reintroduction of crude into the market.
Meanwhile, data from energy services firm Baker Hughes showed that U.S. producers are scaling back. The number of active oil rigs fell by 8 to 465 last week the lowest level since November 2021 as companies respond to lower price margins.
Despite the current uptick, oil prices remain well below 2022 highs, weighed down by concerns about sluggish global demand, high inventory levels, and macroeconomic uncertainty.
The outcome of the upcoming OPEC+ meeting next week will be closely watched by traders and analysts, as it could set the tone for oil prices heading into the second half of the year.
